093_HB3876

 
                                     LRB093 13283 LRD 18554 b

 1        AN ACT in relation to public employee benefits.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  5.   The  Illinois  Pension  Code  is amended by
 5    changing Sections 14-108.3 and 16-133.3 as follows:

 6        (40 ILCS 5/14-108.3)
 7        Sec. 14-108.3.  Early retirement incentives.
 8        (a)  To be eligible for the  benefits  provided  in  this
 9    Section, a person must:
10             (1)  be  a  member  of  this  System who, on any day
11        during June, 2002, is (i) in active payroll status  in  a
12        position  of  employment  with a department and an active
13        contributor  to  this  System  with   respect   to   that
14        employment,  and  terminates  that  employment before the
15        retirement annuity under this Article begins, or (ii)  on
16        layoff  status  from  such  a  position  with  a right of
17        re-employment or recall to service,  or  (iii)  receiving
18        benefits  under  Section  14-123, 14-123.1 or 14-124, but
19        only if the member has not been receiving those  benefits
20        for  a  continuous  period of more than 2 years as of the
21        date of application;
22             (2)  not have received any retirement annuity  under
23        this Article beginning earlier than August 1, 2002;
24             (3)  file  with the Board on or before June 30, 2004
25        December 31, 2002 a written  application  requesting  the
26        benefits provided in this Section;
27             (4)  terminate  employment  under  this  Article  no
28        later  than  June 30, 2004 December 31, 2002 (or the date
29        established under subsection (d), if applicable);
30             (5)  by the date of termination of service, have  at
31        least  8  years of creditable service under this Article,
 
                            -2-      LRB093 13283 LRD 18554 b
 1        without the use of  any  creditable  service  established
 2        under this Section;
 3             (6)  by  the date of termination of service, have at
 4        least 5 years  of  membership  service  earned  while  an
 5        employee  under  this Article, which may include military
 6        service for which credit  is  established  under  Section
 7        14-105(b), service during the qualifying period for which
 8        credit   is  established  under  Section  14-104(a),  and
 9        service for which credit has been established by repaying
10        a refund under Section  14-130,  but  shall  not  include
11        service  for  which any other optional service credit has
12        been established; and
13             (7)  not receive any early retirement benefit  under
14        Section 16-133.3 of this Code.
15        (b)    An  eligible person may establish up to 5 years of
16    creditable service under this Article, in increments  of  one
17    month,  by  making  the contributions specified in subsection
18    (c).  In addition,  for  each  month  of  creditable  service
19    established  under this Section, a person's age at retirement
20    shall be deemed to be one month older than it actually is.
21        The creditable service established under this Section may
22    be  used  for  all  purposes  under  this  Article  and   the
23    Retirement Systems Reciprocal Act, except for the computation
24    of  final average compensation under Section 14-103.12 or the
25    determination of compensation under this or any other Article
26    of this Code.
27        The age enhancement established under  this  Section  may
28    not  be  used  to  enable  any  person  to  begin receiving a
29    retirement annuity calculated  under  Section  14-110  before
30    actually  attaining age 50 (without any age enhancement under
31    this Section).  The age enhancement  established  under  this
32    Section may be used for all other purposes under this Article
33    (including  calculation of a proportionate annuity payable by
34    this System under the  Retirement  Systems  Reciprocal  Act),
 
                            -3-      LRB093 13283 LRD 18554 b
 1    except  for  purposes  of  the level income option in Section
 2    14-112, the reversionary annuity under  Section  14-113,  and
 3    the required distributions under Section 14-121.1.
 4        The age enhancement established under this Section may be
 5    used in determining benefits payable under Article 16 of this
 6    Code  under  the  Retirement  Systems  Reciprocal Act, if the
 7    person has at least 5 years of service credit in the  Article
 8    16  system that was earned while participating in that system
 9    as a teacher (as defined in Section  16-106)  employed  by  a
10    department   (as   defined   in   Section  14-103.04).    Age
11    enhancement  established  under  this   Section   shall   not
12    otherwise be used in determining benefits payable under other
13    Articles of this Code under the Retirement Systems Reciprocal
14    Act.
15        (c)  For  all  creditable  service established under this
16    Section,  a  person  must  pay  to  the  System  an  employee
17    contribution to be determined by the  System,  based  on  the
18    member's  rate  of  compensation on June 1, 2002 (or the last
19    date before June 1, 2002 for which a rate can be  determined)
20    and  the  retirement  contribution  rate in effect on June 1,
21    2002 for the member (or for  members  with  the  same  social
22    security and alternative formula status as the member).
23        If the member receives a lump sum payment for accumulated
24    vacation,  sick leave and personal leave upon withdrawal from
25    service, and the net amount of that lump sum  payment  is  at
26    least  as  great  as  the amount of the contribution required
27    under this Section, the entire contribution must be  paid  by
28    the  employee by payroll deduction.  If there is no such lump
29    sum payment, or if it is less than the contribution  required
30    under  this Section, the member shall make an initial payment
31    by payroll deduction, equal to the net amount of the lump sum
32    payment for accumulated vacation, sick  leave,  and  personal
33    leave,  and  have  the  remaining  amount  due  treated  as a
34    reduction from the retirement annuity  in  24  equal  monthly
 
                            -4-      LRB093 13283 LRD 18554 b
 1    installments  beginning  in the month in which the retirement
 2    annuity takes effect.  The required contribution may be  paid
 3    as  a  pre-tax  deduction  from  earnings.   For  federal and
 4    Illinois tax  purposes,  the  monthly  amount  by  which  the
 5    annuitant's  benefit  is  reduced  shall  not be treated as a
 6    contribution by the annuitant, but rather as a  reduction  of
 7    the annuitant's monthly benefit.
 8        (c-5)  The  reduction  in  retirement annuity provided in
 9    subsection (c) of  Section  14-108  does  not  apply  to  the
10    annuity of a person who retires under this Section.  A person
11    who  has  received  any age enhancement or creditable service
12    under  this  Section  may  begin  to  receive  an   unreduced
13    retirement annuity upon attainment of age 55 with at least 25
14    years  of  creditable  service (including any age enhancement
15    and creditable service established under this Section).
16        (d)  In order to ensure that the efficient  operation  of
17    State  government  is  not  jeopardized  by  the simultaneous
18    retirement of large numbers of key personnel, the director or
19    other head of a department may, for  key  employees  of  that
20    department,   extend  the  December  31,  2002  deadline  for
21    terminating employment  under  this  Article  established  in
22    subdivision  (a)(4)  of this Section to a date not later than
23    April 30, 2003 by so  notifying  the  System  in  writing  by
24    December 31, 2002.
25        (e)  Notwithstanding  Section  14-111,  a  person who has
26    received any age enhancement or creditable service under this
27    Section and who reenters service under this Article (or as an
28    employee of a department under Article 16) other  than  as  a
29    temporary  employee thereby forfeits that age enhancement and
30    creditable service  and  is  entitled  to  a  refund  of  the
31    contributions made pursuant to this Section.
32        (f)  The   System  shall  determine  the  amount  of  the
33    increase in unfunded accrued  liability  resulting  from  the
34    granting  of  early  retirement incentives under this Section
 
                            -5-      LRB093 13283 LRD 18554 b
 1    and shall report that amount to the Governor and the  Pension
 2    Laws Commission on or before November 15, 2003.  The increase
 3    in  liability reported under this subsection (f) shall not be
 4    included  in  the   calculation   of   the   required   State
 5    contribution under Section 14-131.
 6        (g)  The  System shall determine the amount of the annual
 7    State  contribution  necessary  to  amortize   on   a   level
 8    dollar-payment  basis,  over  a  period  of  10 years at 8.5%
 9    interest,  compounded  annually,  an  amount  equal  to   the
10    increase  in  unfunded  accrued  liability  determined  under
11    subsection  (f)  minus $70,000,000.  The System shall certify
12    the amount of this annual State contribution to the Governor,
13    the State Comptroller, the Bureau  of  the  Budget,  and  the
14    Pension Laws Commission on or before November 15, 2003.
15        In addition to the contributions otherwise required under
16    this  Article,  the  State  shall  appropriate and pay to the
17    System (1) an amount equal to  $70,000,000  in  State  fiscal
18    year  2004 and (2) in each of State fiscal years 2005 through
19    2013, an  amount  equal  to  the  annual  State  contribution
20    certified by the System under this subsection (g).
21        (h)  The  Pension  Laws  Commission  shall  determine and
22    report to the General Assembly, on or before January 1,  2004
23    and  annually  thereafter through the year 2013, its estimate
24    of (1) the annual amount of  payroll  savings  likely  to  be
25    realized  by the State as a result of the early retirement of
26    persons receiving  early  retirement  incentives  under  this
27    Section  and  (2) the net annual savings or cost to the State
28    from the program of early retirement incentives created under
29    this Section.
30        The  System,  the  Department   of   Central   Management
31    Services, the Bureau of the Budget, and all other departments
32    shall  provide  to  the  Commission  any  assistance that the
33    Commission may request with respect to its reports under this
34    Section.  The Commission may require departments  to  provide
 
                            -6-      LRB093 13283 LRD 18554 b
 1    it  with  any  information  that it deems necessary or useful
 2    with respect to its reports  under  this  Section,  including
 3    without  limitation  information about (1) the final earnings
 4    of  former  department  employees  who  elected  to   receive
 5    benefits  under  this  Section,  (2)  the earnings of current
 6    department employees holding the positions vacated by persons
 7    who elected to receive benefits under this Section,  and  (3)
 8    positions  vacated by persons who elected to receive benefits
 9    under this Section that have not yet been refilled.
10        (i)  The changes made to this Section by this  amendatory
11    Act  of the 92nd General Assembly do not apply to persons who
12    retired under this Section on or before May 1, 1992.
13        (j)  The changes made to this Section by this  amendatory
14    Act of the 93rd General Assembly apply only to (1) persons in
15    service  under  this  Article  on  the effective date of this
16    amendatory Act and (2) persons who leave active service after
17    December 31, 2002 and before July 1, 2004.
18    (Source: P.A. 92-566, eff. 6-25-02.)

19        (40 ILCS 5/16-133.3) (from Ch. 108 1/2, par. 16-133.3)
20        Sec. 16-133.3.  Early  retirement  incentives  for  State
21    employees.
22        (a)  To  be  eligible  for  the benefits provided in this
23    Section, a person must:
24             (1)  be a member of this  System  who,  on  any  day
25        during  June,  2002, is (i) in active payroll status as a
26        full-time teacher employed by a department and an  active
27        contributor   to   this   System  with  respect  to  that
28        employment, or (ii) on layoff status from such a position
29        with a right of re-employment or recall  to  service,  or
30        (iii) receiving a disability benefit under Section 16-149
31        or  16-149.1,  but  only  if  the  member  has  not  been
32        receiving  that  benefit  for a continuous period of more
33        than 2 years as of the date of application;
 
                            -7-      LRB093 13283 LRD 18554 b
 1             (2)  not have received any retirement annuity  under
 2        this Article beginning earlier than August 1, 2002;
 3             (3)  file  with the Board on or before June 30, 2004
 4        December 31, 2002 a written  application  requesting  the
 5        benefits provided in this Section;
 6             (4)  terminate  employment  under  this  Article  no
 7        later  than  June 30, 2004 December 31, 2002 (or the date
 8        established under subsection (d), if applicable);
 9             (5)  by the date of termination of service, have  at
10        least  8  years of creditable service under this Article,
11        without the use of  any  creditable  service  established
12        under this Section;
13             (6)  by  the date of termination of service, have at
14        least  5   years   of   service   credit   earned   while
15        participating  in  the  System as a teacher employed by a
16        department; and
17             (7)  not receive any early retirement benefit  under
18        Section 14-108.3 of this Code.
19        For  the  purposes  of this Section, "department" means a
20    department as defined in Section  14-103.04  that  employs  a
21    teacher as defined in this Article.
22        (b)  An  eligible  person  may establish up to 5 years of
23    creditable  service  under  this  Article   by   making   the
24    contributions  specified in subsection (c).  In addition, for
25    each period of  creditable  service  established  under  this
26    Section,  a  person's age at retirement shall be deemed to be
27    enhanced by an equivalent period.
28        The creditable service established under this Section may
29    be  used  for  all  purposes  under  this  Article  and   the
30    Retirement Systems Reciprocal Act, except for the computation
31    of  final  average  salary,  the  determination  of salary or
32    compensation under this Article or any other Article of  this
33    Code,   or  the  determination  of  eligibility  for  or  the
34    computation of benefits under Section 16-133.2.
 
                            -8-      LRB093 13283 LRD 18554 b
 1        The age enhancement established under this Section may be
 2    used  for  all  purposes  under   this   Article   (including
 3    calculation of a proportionate annuity payable by this System
 4    under  the  Retirement  Systems  Reciprocal  Act), except for
 5    purposes of a retirement annuity under Section  16-133(a)(A),
 6    a  reversionary  annuity  under  Section 16-136, the required
 7    distributions under Section 16-142.3, and  the  determination
 8    of  eligibility  for  or  the  computation  of benefits under
 9    Section 16-133.2.  Age  enhancement  established  under  this
10    Section  may  be  used  in determining benefits payable under
11    Article  14  of  this  Code  under  the  Retirement   Systems
12    Reciprocal  Act (subject to the limitations on the use of age
13    enhancement provided in Section  14-108.3);  age  enhancement
14    established   under   this  Section  shall  not  be  used  in
15    determining benefits payable under  other  Articles  of  this
16    Code under the Retirement Systems Reciprocal Act.
17        (c)  For  all  creditable  service established under this
18    Section,  a  person  must  pay  to  the  System  an  employee
19    contribution to be determined by the System, equal to 9.0% of
20    the member's highest annual salary rate that would be used in
21    the  determination  of  the  average  salary  for  retirement
22    annuity purposes if  the  member  retired  immediately  after
23    withdrawal,  for  each year of creditable service established
24    under this Section.
25        If the member receives a lump sum payment for accumulated
26    vacation, sick leave, and personal leave upon withdrawal from
27    service, and the net amount of that lump sum  payment  is  at
28    least  as  great  as  the amount of the contribution required
29    under this Section, the entire contribution must be  paid  by
30    the  employee by payroll deduction.  If there is no such lump
31    sum payment, or if it is less than the contribution  required
32    under  this Section, the member shall make an initial payment
33    by payroll deduction, equal to the net amount of the lump sum
34    payment for accumulated vacation, sick  leave,  and  personal
 
                            -9-      LRB093 13283 LRD 18554 b
 1    leave,  and  have  the  remaining  amount  due  treated  as a
 2    reduction from the retirement annuity  in  24  equal  monthly
 3    installments  beginning  in the month in which the retirement
 4    annuity takes effect.  The required contribution may be  paid
 5    as a pre-tax deduction from earnings.
 6        (d)  In  order  to ensure that the efficient operation of
 7    State government  is  not  jeopardized  by  the  simultaneous
 8    retirement of large numbers of key personnel, the director or
 9    other  head  of  a  department may, for key employees of that
10    department,  extend  the  December  31,  2002  deadline   for
11    terminating  employment  under  this  Article  established in
12    subdivision (a)(4) of this Section to a date not  later  than
13    April  30,  2003  by  so  notifying  the System in writing by
14    December 31, 2002.
15        (e)  A person who has received  any  age  enhancement  or
16    creditable  service  under  this  Section  and  who  reenters
17    contributing  service  under this Article or Article 14 shall
18    thereby forfeit that age enhancement and creditable  service,
19    and  become  entitled  to  a refund of the contributions made
20    pursuant to this Section.
21        (f)  The  System  shall  determine  the  amount  of   the
22    increase  in  unfunded  accrued  liability resulting from the
23    granting of early retirement incentives  under  this  Section
24    and  shall report that amount to the Governor and the Pension
25    Laws Commission on or before November 15, 2003.  The increase
26    in liability reported under this subsection (f) shall not  be
27    included   in   the   calculation   of   the  required  State
28    contribution under Section 16-158.
29        (g)  The System shall determine the amount of the  annual
30    State   contribution   necessary   to  amortize  on  a  level
31    dollar-payment basis, over a  period  of  10  years  at  8.5%
32    interest,   compounded  annually,  an  amount  equal  to  the
33    increase  in  unfunded  accrued  liability  determined  under
34    subsection (f) minus $1,000,000.  The  System  shall  certify
 
                            -10-     LRB093 13283 LRD 18554 b
 1    the amount of this annual State contribution to the Governor,
 2    the  State  Comptroller,  the  Bureau  of the Budget, and the
 3    Pension Laws Commission on or before November 15, 2003.
 4        In addition to the contributions otherwise required under
 5    this Article, the State shall  appropriate  and  pay  to  the
 6    System (1) an amount equal to $1,000,000 in State fiscal year
 7    2004 and (2) in each of State fiscal years 2005 through 2013,
 8    an amount equal to the annual State contribution certified by
 9    the System under this subsection (g).
10        (h)  The  Pension  Laws  Commission  shall  determine and
11    report to the General Assembly, on or before January 1,  2004
12    and  annually  thereafter through the year 2013, its estimate
13    of (1) the annual amount of  payroll  savings  likely  to  be
14    realized  by the State as a result of the early retirement of
15    persons receiving  early  retirement  incentives  under  this
16    Section  and  (2) the net annual savings or cost to the State
17    from the program of early retirement incentives created under
18    this Section.
19        The  System,  the  Department   of   Central   Management
20    Services, the Bureau of the Budget, and all other departments
21    shall  provide  to  the  Commission  any  assistance that the
22    Commission may request with respect to its reports under this
23    Section.  The Commission may require departments  to  provide
24    it  with  any  information  that it deems necessary or useful
25    with respect to its reports  under  this  Section,  including
26    without  limitation  information about (1) the final earnings
27    of  former  department  employees  who  elected  to   receive
28    benefits  under  this  Section,  (2)  the earnings of current
29    department employees holding the positions vacated by persons
30    who elected to receive benefits under this Section,  and  (3)
31    positions  vacated by persons who elected to receive benefits
32    under this Section that have not yet been refilled.
33        (i)  The changes made to this Section by this  amendatory
34    Act  of the 92nd General Assembly do not apply to persons who
 
                            -11-     LRB093 13283 LRD 18554 b
 1    retired under this Section on or before May 1, 1992.
 2        (j)  The changes made to this Section by this  amendatory
 3    Act of the 93rd General Assembly apply only to (1) persons in
 4    service with a department under this Article on the effective
 5    date  of this amendatory Act and (2) persons who leave active
 6    service after December 31, 2002 and before July 1, 2004.
 7    (Source: P.A. 92-566, eff. 6-25-02.)

 8        Section 99. Effective date.  This Act takes  effect  upon
 9    becoming law.