SB0440sam001 99TH GENERAL ASSEMBLY

Sen. John G. Mulroe

Filed: 4/18/2016

09900SB0440sam001 LRB099 03101 EFG 47764 a

AMENDMENT TO SENATE BILL 440

AMENDMENT NO. ______. Amend Senate Bill 440 by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Pension Code is amended by changing Sections 6-150, 6-152, 6-158, 6-164, 6-166, 6-167, and 6-229 as follows:

(40 ILCS 5/6-150) (from Ch. 108 1/2, par. 6-150)

Sec. 6-150. Death benefit.

(a) Effective January 1, 1962, an ordinary death benefit shall be payable on account of any fireman in service and in receipt of salary on or after such date, which benefit shall be in addition to all other annuities and benefits herein provided. This benefit shall be payable upon death of a fireman:

(1) occurring in active service while in receipt of salary;

(2) on an authorized and approved leave of absence, without salary, beginning on or after January 1, 1962, if the death occurs within 60 days from the date the fireman was in receipt of salary;

(3) receiving duty, occupational disease, or ordinary disability benefit;

(4) occurring within 60 days from the date of termination of duty disability, occupational disease disability or ordinary disability benefit payments if re-entry into service had not occurred; or

(5) occurring on retirement and while in receipt of an age and service annuity, prior service annuity, Tier 2 monthly retirement annuity, or minimum annuity; provided (a) retirement on such annuity occurred on or after January 1, 1962, and (b) such separation from service was effective on or after the fireman's attainment of age 50, and (c) application for such annuity was made within 60 days after separation from service.

(b) The ordinary death benefit shall be payable to such beneficiary or beneficiaries as the fireman has nominated by written direction duly signed and acknowledged before an officer authorized to take acknowledgments, and filed with the board. If no such written direction has been filed or if the designated beneficiaries do not survive the fireman, payment of the benefit shall be made to his estate.

(c) Beginning July 1, 1983, if death occurs prior to retirement on annuity and before the fireman's attainment of age 50, the amount of the benefit payable shall be $12,000. Beginning July 1, 1983, if death occurs prior to retirement, at age 50 or over, the benefit of $12,000 shall be reduced $400 for each year (commencing on the fireman's attainment of age 50 and thereafter on each succeeding birth date) that the fireman's age, at date of death, is more than age 49, but in no event below the amount of $6,000.

Beginning July 1, 1983, if the fireman's death occurs while he is in receipt of an annuity, the benefit shall be $6,000.

(Source: P.A. 83-152.)

(40 ILCS 5/6-152) (from Ch. 108 1/2, par. 6-152)

Sec. 6-152. Ordinary disability benefits. Any fireman who is not eligible for minimum annuity or Tier 2 monthly retirement annuity, and who becomes disabled after the effective date as the result of any cause other than the performance of an act or acts of duty, shall have a right to receive ordinary disability benefit during any period or periods of such disability, after the first 30 days of disability. Payment of such benefits shall not exceed, in the aggregate, throughout the entire service of the fireman, a period equal to 1/2 of the total service rendered by him prior to the time he became disabled, but not to exceed 5 years. In computing such period of service, the time that the fireman received ordinary disability benefit shall not be included.

The first payment of the benefit shall be made not later than one month after the benefit is granted and each subsequent payment shall be made not later than one month after the time when the latest payment was made.

When a disabled fireman becomes eligible for minimum annuity or Tier 2 monthly retirement annuity, the disability benefit shall cease and he shall thereafter receive such annuity or annuities as are provided for him in accordance with other provisions of this Article.

Ordinary disability benefit shall be 50% of the fireman's salary at the time the disability occurs. Before any payment is made, a sum ordinarily deducted from the fireman's salary for annuity purposes during a period of time equal to that for which such payment of ordinary disability benefit is to be made shall be deducted from such payment and credited to him as a deduction from his salary for such period. The sums so credited shall be regarded, for annuity and refund purposes, as sums contributed by the fireman.

(Source: P.A. 84-11.)

(40 ILCS 5/6-158) (from Ch. 108 1/2, par. 6-158)

Sec. 6-158. Refund - General.

(a) A fireman who withdraws before age 50 and a fireman with less than 10 years of service who withdraws before age 57, or any fireman who withdraws and enters the service of another department of the city, has a right to a refund of the entire amount to his credit as of the date of withdrawal for age and service annuity or Tier 2 monthly retirement annuity, for automatic annual increase in annuity as provided in Section 6-164, and for widow's annuity or Tier 2 surviving spouse's annuity, from deductions from salary.

(b) Any such fireman shall be entitled to refund until he re-enters service or until his annuity is fixed.

(c) A fireman who receives a refund forfeits all rights to any annuity or benefit from the fund, for himself and for any other person who might benefit through him because of his service, provided he shall retain the right to credit for any such service, for the purpose of computing his total service if he re-enters service before age 57, becomes a beneficiary of the fund and makes repayment of the refund with interest.

(d) A fireman completing 10 years of service who does not receive a refund, may receive an annuity as provided in this Article.

(e) A fireman completing less than 10 years who does not receive a refund has a right to have all amounts to his credit for annuity purposes on the date of withdrawal improved by interest while he is out of service until age 57 only, for his benefit and the benefit of any person who may have any right to annuity through him, if he subsequently reenters service and attains a right to annuity.

(Source: Laws 1965, p. 2464.)

(40 ILCS 5/6-164) (from Ch. 108 1/2, par. 6-164)

Sec. 6-164. Automatic annual increase; retirement after September 1, 1959.

(a) A fireman qualifying for a minimum annuity who retires from service after September 1, 1959 shall, upon either the first of the month following the first anniversary of his date of retirement if he is age 60 (age 55 if born before January 1, 1955) or over on that anniversary date, or upon the first of the month following his attainment of age 60 (age 55 if born before January 1, 1955) if that occurs after the first anniversary of his retirement date, have his then fixed and payable monthly annuity increased by 1 1/2%, and such first fixed annuity as granted at retirement increased by an additional 1 1/2% in January of each year thereafter up to a maximum increase of 30%. Beginning July 1, 1982 for firemen born before January 1, 1930, and beginning January 1, 1990 for firemen born after December 31, 1929 and before January 1, 1940, and beginning January 1, 1996 for firemen born after December 31, 1939 but before January 1, 1945, and beginning January 1, 2004, for firemen born after December 31, 1944 but before January 1, 1955, such increases shall be 3% and such firemen shall not be subject to the 30% maximum increase.

Any fireman born before January 1, 1945 who qualifies for a minimum annuity and retires after September 1, 1967 but has not received the initial increase under this subsection before January 1, 1996 is entitled to receive the initial increase under this subsection on (1) January 1, 1996, (2) the first anniversary of the date of retirement, or (3) attainment of age 55, whichever occurs last. The changes to this Section made by this amendatory Act of 1995 apply beginning January 1, 1996 and apply without regard to whether the fireman or annuitant terminated service before the effective date of this amendatory Act of 1995.

Any fireman born before January 1, 1955 who qualifies for a minimum annuity and retires after September 1, 1967 but has not received the initial increase under this subsection before January 1, 2004 is entitled to receive the initial increase under this subsection on (1) January 1, 2004, (2) the first anniversary of the date of retirement, or (3) attainment of age 55, whichever occurs last. The changes to this Section made by this amendatory Act of the 93rd General Assembly apply without regard to whether the fireman or annuitant terminated service before the effective date of this amendatory Act.

(b) Subsection (a) of this Section is not applicable to an employee receiving a term annuity.

(c) To help defray the cost of such increases in annuity, there shall be deducted, beginning September 1, 1959, from each payment of salary to a fireman, 1/8 of 1% of each such salary payment and an additional 1/8 of 1% beginning on September 1, 1961, and September 1, 1963, respectively, concurrently with and in addition to the salary deductions otherwise made for annuity purposes.

Each such additional 1/8 of 1% deduction from salary which shall, on September 1, 1963, result in a total increase of 3/8 of 1% of salary, shall be credited to the Automatic Increase Reserve, to be used, together with city contributions as provided in this Article, to defray the cost of the 1 1/2% annuity increments herein specified in this Section. Any balance in such reserve as of the beginning of each calendar year shall be credited with interest at the rate of 3% per annum.

The salary deductions provided in this Section are not subject to refund, except to the fireman himself, in any case in which: (i) the a fireman withdraws prior to qualification for minimum annuity or Tier 2 monthly retirement annuity and applies for refund, (ii) the fireman or applies for an annuity of a type that is not subject to annual increases under this Section, or (iii) , and also where a term annuity becomes payable. In such cases, the total of such salary deductions shall be refunded to the fireman, without interest, and charged to the aforementioned reserve.

(d) Notwithstanding any other provision of this Article, the Tier 2 monthly retirement annuity of a person who first becomes a fireman under this Article on or after January 1, 2011 shall be increased on the January 1 occurring either on or after (i) the attainment of age 60 or (ii) the first anniversary of the annuity start date, whichever is later. Each annual increase shall be calculated at 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted retirement annuity. If the annual unadjusted percentage change in the consumer price index-u for a 12-month period ending in September is zero or, when compared with the preceding period, decreases, then the annuity shall not be increased.

For the purposes of this subsection (d), "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the pension funds by November 1 of each year.

(Source: P.A. 96-1495, eff. 1-1-11.)

(40 ILCS 5/6-166) (from Ch. 108 1/2, par. 6-166)

Sec. 6-166. Contributions for age and service annuities or Tier 2 monthly retirement annuities for present employees and future entrants.

(a) After the effective date and prior to July 1, 1953, 3 1/2%, and after June 30, 1953, and prior to September 1, 1959, 6%, and beginning September 1, 1959, 7 1/8% of each payment of the salary of each present employee and future entrant shall be deducted and contributed to the fund for age and service annuity or Tier 2 monthly retirement annuity. The deductions shall be made at the time payments of salary are payable and shall continue while the employee is in service.

Concurrently with each such contribution, the city shall contribute 8 1/2% of each payment of salary, but the city contributions shall cease for all employees upon their attainment of age 63.

(b) Each contribution by the employee and the city shall be allocated to the account of and credited to the employee, and shall be improved by interest at the applicable rate during the time he is in service until the age and service annuity is fixed. Any accretion, by way of interest or otherwise, upon such sum or any deduction from salary made after the annuity is fixed for a present employee or after attainment of age 63 by a future entrant who first becomes a fireman under this Article before January 1, 2011 shall not be credited to the employee for age and service annuity.

(Source: P.A. 76-1668.)

(40 ILCS 5/6-167) (from Ch. 108 1/2, par. 6-167)

Sec. 6-167. Contributions for widow's annuity and Tier 2 surviving spouse's annuity. Beginning on the effective date and prior to September 1, 1957, 1% of each payment of salary of not more than $3,000 of each employee and beginning September 1, 1957, 1% of each payment of salary of not more than $6,000 of each present employee and future entrant shall be deducted and contributed to the fund for widow's annuity. After September 1, 1967 and prior to January 1, 1976, 1%, and beginning January 1, 1976, 1 1/2% of salary without limitation shall be deducted from the pay of each present employee and future entrant and contributed to the fund for widow's annuity or Tier 2 surviving spouse's annuity. The deduction shall be made at the time the payments of salary are payable and shall continue during the service of the employee.

Concurrently with each contribution, the city shall contribute 2% of each payment of salary.

Each contribution by the employee and the city shall be allocated to the accounts of and credited to the employee for widow's annuity or Tier 2 surviving spouse's annuity.

(Source: P.A. 79-633.)

(40 ILCS 5/6-229)

Sec. 6-229. Provisions applicable to new hires; Tier 2.

(a) Notwithstanding any other provision of this Article, the provisions of this Section apply to a person who first becomes a fireman under this Article on or after January 1, 2011, and to certain qualified survivors of such a fireman. Such persons, and the benefits and restrictions that apply specifically to them under this Article, may be referred to as "Tier 2".

(b) A fireman who has withdrawn from service, has attained age 50 55 or more, and who has 10 or more years of service in that capacity shall be entitled, upon proper application being received by the Fund, at his option to receive a Tier 2 monthly retirement annuity for his service as a fireman. The Tier 2 monthly retirement annuity shall be computed by multiplying 2.5% for each year of such service by his or her final average salary, subject to an annuity reduction factor of . The retirement annuity of a fireman who is retiring after attaining age 50 with 10 or more years of creditable service shall be reduced by one-half of 1% for each month that the fireman's age at retirement is under age 55. The Tier 2 monthly retirement annuity is in lieu of any age and service annuity or other form of retirement annuity under this Article.

The maximum retirement annuity under this subsection (b) shall be 75% of final average salary.

For the purposes of this subsection (b), "final average salary" means the average monthly salary obtained by dividing the total salary of the fireman during the 96 consecutive months of service within the last 120 months of service in which the total salary was the highest by the number of months of service in that period.

Beginning on January 1, 2011, for all purposes under this Code (including without limitation the calculation of benefits and employee contributions), the annual salary based on the plan year of a member or participant to whom this Section applies shall not exceed $106,800; however, that amount shall annually thereafter be increased by the lesser of (i) 3% of that amount, including all previous adjustments, or (ii) one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, including all previous adjustments.

(b-5) For the purposes of this Section, "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the retirement systems and pension funds by November 1 of each year.

(c) Notwithstanding any other provision of this Article, for a person who first becomes a fireman under this Article on or after January 1, 2011, eligibility for and the amount of the annuity to which the qualified surviving spouse, children, and or parents of the fireman are entitled under this subsection (c) shall be determined as follows:

(1) The surviving spouse of a deceased fireman to whom this Section applies shall be deemed qualified to receive a Tier 2 surviving spouse's annuity under this paragraph (1) if: (i) the deceased fireman meets the requirements specified under subdivision (A) or (B) of this paragraph (1); and (ii) the surviving spouse would not otherwise be excluded from receiving a widow's annuity under the eligibility requirements for a widow's annuity set forth in Section 6-142. The Tier 2 surviving spouse's annuity is in lieu of the widow's annuity determined under any other Section of this Article and is subject to the requirements of Section 6-143.2.

As used in this subsection (c), "earned pension" means a Tier 2 monthly retirement annuity determined under subsection (b) of this Section, including any increases the fireman had received pursuant to Section 6-164.

(A) If the deceased fireman was receiving an earned pension at the date of his or her death, the Tier 2 surviving spouse's annuity under this paragraph (1) shall be in the amount of 66 2/3% of the fireman's earned pension at the date of death.

(B) If the deceased fireman was not receiving an earned pension but had at least 10 years of service at the time of death, the Tier 2 surviving spouse's annuity under this paragraph (1) shall be in the amount of 66 2/3% of the Tier 2 monthly retirement annuity that the deceased fireman would have been eligible to receive under subsection (b) of this Section, based upon the actual service accrued through the day before the fireman's death, but determined as though the fireman was at least age 55 on the day before his or her death and retired on that day.

(C) Notwithstanding any other provision of this Article, the monthly Tier 2 surviving spouse's annuity under subdivision (A) or (B) of this paragraph (1) of a survivor of a person who first becomes a fireman under this Article on or after January 1, 2011 shall be increased on the January 1 next occurring after (i) attainment of age 60 by the recipient of the Tier 2 surviving spouse's annuity or (ii) the first anniversary of the Tier 2 surviving spouse's annuity start date, whichever is later, survivor's pension and on each January 1 thereafter, by 3% or one-half the annual unadjusted percentage increase in the consumer price index-u for the 12 months ending with September preceding each November 1, whichever is less, of the originally granted Tier 2 surviving spouse's survivor's annuity. If the annual unadjusted percentage change in the consumer price index-u for a 12-month period ending in September is zero or, when compared with the preceding period, decreases, then the annuity shall not be increased.

(D) Notwithstanding the other provisions of this paragraph (1), for a qualified surviving spouse who is entitled to a Tier 2 surviving spouse's annuity under subdivision (A) or (B) of this paragraph (1), that Tier 2 surviving spouse's annuity shall not be less than the amount of the minimum widow's annuity established from time to time under Section 6-128.4.

(2) Surviving children of a deceased fireman subject to this Section who would otherwise meet the eligibility requirements for a child's annuity set forth in Sections 6-147 and 6-148 shall be deemed qualified to receive a Tier 2 child's annuity under this subsection (c), which shall be in lieu of, but in the same amount and paid in the same manner as, the child's annuity provided under those Sections; except that any salary used for computing a Tier 2 child's annuity shall be subject to the Tier 2 salary cap provided under subsection (b) of this Section. For purposes of determining any pro rata reduction in child's annuities under this subsection (c), references in Section 6-148 to the combined annuities of the family shall be deemed to refer to the combined Tier 2 surviving spouse's annuity, if any, and the Tier 2 child's annuities payable under this subsection (c).

(3) Surviving parents of a deceased fireman subject to this Section who would otherwise meet the eligibility requirements for a parent's annuity set forth in Section 6-149 shall be deemed qualified to receive a Tier 2 parent's annuity under this subsection (c), which shall be in lieu of, but in the same amount and paid in the same manner as, the parent's annuity provided under Section 6-149; except that any salary used for computing a Tier 2 parent's annuity shall be subject to the Tier 2 salary cap provided under subsection (b) of this Section. For the purposes of this Section, a reference to "annuity" in Section 6-149 includes: (i) in the context of a widow, a Tier 2 surviving spouse's annuity and (ii) in the context of a child, a Tier 2 child's annuity.

(d) The General Assembly finds and declares that the provisions of this Section, as enacted by Public Act 96-1495, require clarification relating to necessary eligibility standards and the manner of determining and paying the intended Tier 2 benefits and contributions in order to enable the Fund to unambiguously implement and administer benefits for Tier 2 members. The changes to this Section and the conforming changes to Sections 6-150, 6-152, 6-158, 6-164, 6-166, and 6-167 made by this amendatory Act of the 99th General Assembly are enacted to clarify the provisions of this Section as enacted by Public Act 96-1495, and are hereby declared to represent and be consistent with the original and continuing intent of this Section and Public Act 96-1495.

(e) The changes made by this amendatory Act of the 99th General Assembly are intended to be retroactive to January 1, 2011 (the effective date of Public Act 96-1495) and, for the purposes of Section 1-103.1 of this Code, they apply without regard to whether the relevant fireman was in service on or after the effective date of this amendatory Act of the 99th General Assembly.

(Source: P.A. 96-1495, eff. 1-1-11.)".