093_SB1103

 
                                     LRB093 10710 EFG 11093 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 7-142 and 7-173 and adding Section 7-173.3
 6    as follows:

 7        (40 ILCS 5/7-142) (from Ch. 108 1/2, par. 7-142)
 8        Sec. 7-142.  Retirement annuities - Amount.
 9        (a)  The amount of a retirement annuity shall be the  sum
10    of the following, determined in accordance with the actuarial
11    tables in effect at the time of the grant of the annuity:
12             1.  For  employees  with 8 or more years of service,
13        an annuity computed pursuant to subparagraphs a or  b  of
14        this  subparagraph  1,  whichever  is the higher, and for
15        employees with less than 8 years of service  the  annuity
16        computed pursuant to subparagraph a:
17                  a.  The  monthly  annuity which can be provided
18             from the total accumulated normal, municipality  and
19             prior service credits, as of the attained age of the
20             employee  on  the  date  the annuity begins provided
21             that such annuity shall not exceed 75% of the  final
22             rate of earnings of the employee.
23                  b.(i)  The monthly annuity amount determined as
24             follows:
25                  (i)  For  unaugmented creditable service earned
26             before July 1, 2003, by multiplying (a)  1 2/3%  for
27             annuitants with not more than 15 years or (b) 1 2/3%
28             of the employee's final rate of earnings for each of
29             the  first 15 years of creditable service and 2% for
30             each year in excess of 15 years, with any  remaining
31             fraction  of a year for annuitants with more than 15
 
                            -2-      LRB093 10710 EFG 11093 b
 1             years by the number of years plus fractional  years,
 2             prorated  on  the  a  basis  of months of creditable
 3             service and multiply  the  product  thereof  by  the
 4             employee's final rate of earnings.
 5                  For  creditable service earned on or after July
 6             1, 2003 and creditable service  earned  before  that
 7             date  that has been augmented as provided in Section
 8             7-173.3,  2.15% of  the  employee's  final  rate  of
 9             earnings  for  each year of creditable service, with
10             any remaining fraction of a  year  prorated  on  the
11             basis of months.
12                  (ii)  For  the  sole  purpose  of computing the
13             formula (and not for the purposes of the limitations
14             hereinafter stated) $125  shall  be  considered  the
15             final  rate of earnings in all cases where the final
16             rate of earnings is less than such amount.
17                  (iii)  The   monthly   annuity   computed    in
18             accordance  with  this  subparagraph  b,  shall  not
19             exceed  an  amount equal to 75% of the final rate of
20             earnings.
21                  (iv)  For employees who have less than 35 years
22             of service, the annuity computed in accordance  with
23             this  subparagraph  b  (as reduced by application of
24             subparagraph (iii) above) shall be reduced by  0.25%
25             thereof  (0.5%  if  service  was  terminated  before
26             January  1, 1988) for each month or fraction thereof
27             (1) that the employee's age is less than  60  years,
28             or  (2)  if  the  employee  has at least 30 years of
29             service credit, that the employee's  service  credit
30             is  less  than  35  years, whichever is less, on the
31             date the annuity begins.
32             2.  The annuity which can be provided from the total
33        accumulated additional credits as of the attained age  of
34        the employee on the date the annuity begins.
 
                            -3-      LRB093 10710 EFG 11093 b
 1        (b)  If  payment  of  an  annuity  begins  prior  to  the
 2    earliest  age  at which the employee will become eligible for
 3    an  old  age  insurance  benefit  under  the  Federal  Social
 4    Security Act, he may elect that  the  annuity  payments  from
 5    this fund shall exceed those payable after his attaining such
 6    age  by  an  amount,  computed  as determined by rules of the
 7    Board, but not in excess of  his  estimated  Social  Security
 8    Benefit,  determined as of the effective date of the annuity,
 9    provided that in no case shall  the  total  annuity  payments
10    made by this fund exceed in actuarial value the annuity which
11    would have been payable had no such election been made.
12        (c)  The  retirement annuity shall be increased each year
13    by 2%, not compounded, of  the  monthly  amount  of  annuity,
14    taking  into consideration any adjustment under paragraph (b)
15    of this  Section.  This  increase  shall  be  effective  each
16    January  1  and  computed  from  the  effective  date  of the
17    retirement annuity, the first increase  being  .167%  of  the
18    monthly  amount times the number of months from the effective
19    date to January 1. Beginning January 1, 1984 and  thereafter,
20    the  retirement  annuity  shall be increased by 3% each year,
21    not compounded. This increase  shall  not  be  applicable  to
22    annuitants  who  are  not in service on or after September 8,
23    1971.
24    (Source: P.A. 91-357, eff. 7-29-99.)

25        (40 ILCS 5/7-173) (from Ch. 108 1/2, par. 7-173)
26        Sec. 7-173. Contributions by employees.
27        (a)  Each participating employee shall make contributions
28    to the fund as follows:
29             1.  For   retirement   annuity   purposes,    normal
30        contributions  of  3 3/4%  of  earnings  through June 30,
31        2003, and 4.25% of earnings thereafter.
32             2.  Additional contributions of such percentages  of
33        each  payment  of  earnings,  as  shall be elected by the
 
                            -4-      LRB093 10710 EFG 11093 b
 1        employee for retirement  annuity  purposes,  but  not  in
 2        excess  of 10%.  The selected rate shall be applicable to
 3        all earnings beginning on the first  day  of  the  second
 4        month following receipt by the Board of written notice of
 5        election   to   make   such   contributions.   Additional
 6        contributions  at  the  selected  rate  shall   be   made
 7        concurrently with normal contributions.
 8             3.  Survivor  contributions,  by  each participating
 9        employee, of 3/4% of each payment of earnings.
10        (b)  Each employee shall make contributions to  the  fund
11    for  federal  Social Security taxes, for periods during which
12    he is a covered employee, as required by the Social  Security
13    Enabling    Act.     For    participating   employees,   such
14    contributions shall be in addition to  those  required  under
15    paragraph (a) of this Section.
16        (c)  Contributions    shall   be   deducted   from   each
17    corresponding payment of earnings paid to each  employee  and
18    shall   be   remitted  to  the  board  by  the  participating
19    municipality or  participating  instrumentality  making  such
20    payment.   The  remittance,  together  with  a  report of the
21    earnings and contributions shall be made as directed  by  the
22    board.   For  township  treasurers  and employees of township
23    treasurers   qualifying   as   employees    hereunder,    the
24    contributions herein required as deductions from salary shall
25    be  withheld  by  the  school  township  trustees  from funds
26    available  for  the  payment  of  the  compensation  of  such
27    treasurers and employees as provided in the School  Code  and
28    remitted to the board.
29        (d)  An  employee  who  has made additional contributions
30    under paragraph (a)2 of this Section may upon  retirement  or
31    at  any  time  prior  thereto, elect to withdraw the total of
32    such additional  contributions  including  interest  credited
33    thereon to the end of the preceding calendar year.
34        (e)  Failure   to   make   the  deductions  for  employee
 
                            -5-      LRB093 10710 EFG 11093 b
 1    contributions provided in paragraph (c) of this Section shall
 2    not  relieve   the   employee   from   liability   for   such
 3    contributions.  The amount of such liability may be deducted,
 4    with interest charged under Section 7-209, from any annuities
 5    or  benefits  payable  hereunder to the employee or any other
 6    person receiving an annuity or  benefit  by  reason  of  such
 7    employee's participation.
 8        (f)  A  participating  employee who has at least 40 years
 9    of creditable service in the Fund may elect to  cease  making
10    the contributions required under this Section.  The status of
11    the  employee  under this Article shall be unaffected by this
12    election, except that the  employee  shall  not  receive  any
13    additional  creditable  service for the periods of employment
14    following the election.  An election  under  this  subsection
15    relieves   the   employer  from  making  additional  employer
16    contributions in relation to that employee.
17    (Source: P.A. 87-1265.)

18        (40 ILCS 5/7-173.3 new)
19        Sec.  7-173.3.  Optional   contribution   for   augmented
20    retirement formula.
21        (a)  A  member  of the Fund may qualify for the augmented
22    rate under subdivision (a)1.b.(i) of Section  7-142  for  all
23    years  of  creditable  service  earned before July 1, 2003 by
24    making the optional contribution specified in subsection  (b)
25    of  this  Section.  A member may not elect to qualify for the
26    augmented rate for only a portion of his  or  her  creditable
27    service earned before July 1, 2003.
28        (b)  The  contribution  shall be an amount equal to 0.51%
29    of the member's highest salary  rate  in  the  4  consecutive
30    years  immediately  prior  to  but  not including the year in
31    which the application occurs, multiplied  by  the  number  of
32    years  of creditable service earned by the member before July
33    1, 2003.
 
                            -6-      LRB093 10710 EFG 11093 b
 1        The contribution required by  this  subsection  shall  be
 2    paid  in one of the following ways or in a combination of the
 3    following ways that does not extend over more than 5 years:
 4             (i)  in  a  lump  sum  on  or  before  the  date  of
 5        retirement;
 6             (ii)  in substantially  equal  installments  over  a
 7        period of time not to exceed 5 years, as a deduction from
 8        salary;
 9             (iii)  if  the  member  becomes  an  annuitant on or
10        before June 30,  2007,  in  substantially  equal  monthly
11        installments  over  a  24-month  period,  by reducing the
12        annuitant's monthly benefit over a 24-month period by the
13        amount of the  otherwise  applicable  contribution.   For
14        federal  and Illinois tax purposes, the monthly amount by
15        which the annuitant's benefit is  reduced  shall  not  be
16        treated as a contribution by the annuitant, but rather as
17        a reduction of the annuitant's monthly benefit.
18        (c)  If  the  member  fails to make the full contribution
19    under this Section in a timely  fashion,  the  payments  made
20    under  this  Section shall be refunded to the member, without
21    interest.   If  the  member  dies  before  making  the   full
22    contribution,  the payments made under this Section, together
23    with regular interest  thereon,  shall  be  refunded  to  the
24    member's designated beneficiary.
25        (d)  For  purposes  of  this  Section  and the retirement
26    formula  in  Section  7-142,  optional   creditable   service
27    established  by  a member shall be deemed to have been earned
28    at the time of the employment or other qualifying event  upon
29    which  the  service  is  based,  rather  than at the time the
30    credit was established in this Fund.
31        (e)  The contributions required under  this  Section  are
32    the  responsibility  of  the  employee  and not the employer.
33    However,  an  employer  may   specifically   agree,   through
34    collective bargaining or otherwise, to make the contributions
 
                            -7-      LRB093 10710 EFG 11093 b
 1    required by this Section on behalf of its employees.

 2        Section  90.  The State Mandates Act is amended by adding
 3    Section 8.27 as follows:

 4        (30 ILCS 805/8.27 new)
 5        Sec. 8.27. Exempt mandate.   Notwithstanding  Sections  6
 6    and  8 of this Act, no reimbursement by the State is required
 7    for  the  implementation  of  any  mandate  created  by  this
 8    amendatory Act of the 93rd General Assembly.

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