HB0431 95TH GENERAL ASSEMBLY

LRB095 04711 AMC 24770 b

95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB0431

Introduced 1/26/2007, by Rep. Richard T. Bradley

SYNOPSIS AS INTRODUCED:

40 ILCS 5/17-116.7 new
40 ILCS 5/17-116.8 new
30 ILCS 805/8.31 new

Amends the Chicago Teacher Article of the Illinois Pension Code. Provides an early retirement incentive program for certain teachers who terminate service on or after February 1, 2008 and on or before June 30, 2008 or on or after February 1, 2009 and on or before June 30, 2009. Allows the purchase of up to 5 years of age enhancement and creditable service. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

A BILL FOR

AN ACT in relation to public employee benefits.

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

Section 5. The Illinois Pension Code is amended by adding Sections 17-116.7 and 17-116.8 as follows:

(40 ILCS 5/17-116.7 new)

Sec. 17-116.7. Early retirement incentives.

(a)To be eligible for the benefits provided in this Section, a person must:

(1) be a member of this Fund who, on November 1, 2007, is (i) in active payroll status as a teacher, or (ii) on layoff status from such a position with a right of re-employment or recall to service, or (iii) on leave of absence from such a position, but only if the member on leave has not been receiving a disability benefit under this Article for a continuous period of 2 years or more as of the date of application;

(2) be a member of this Fund who, on or after May 1, 2007, is (i) in active payroll status as a teacher, or (ii) on layoff status from such a position with a right of re-employment or recall to service, or (iii) on leave of absence from such a position, but only if the member on leave has not been receiving a disability benefit under this Article for a continuous period of 2 years or more as of the date of application;

(3) have not previously received a retirement pension under this Article;

(4) file with the Board and the Board of Education, before March 1, 2008, a written application requesting the benefits provided in this Section and a notice of resignation from employment, which resignation must take effect no earlier than February 1, 2008 and no later than June 30, 2008, unless the applicant's retirement is delayed under subsection (e) or (f) of this Section;

(5) be eligible to receive a retirement pension under this Article (for which purpose any age enhancement or creditable service received under this Section may be used) and elect to receive the retirement pension beginning no earlier than February 1, 2008 and no later than June 30, 2008 or the date established under subsection (e) or (f) of this Section, if applicable;

(6) have attained age 50 (without the use of any age enhancement or creditable service received under this Section) by the effective date of the retirement pension;

(7) have at least 5 years of creditable service under this Fund or any of the participating systems under the Retirement Systems Reciprocal Act (without the use of any creditable service received under this Section) by the effective date of the retirement pension.

(b) An eligible person may establish up to 5 years of creditable service under this Section. In addition, for each period of creditable service established under this Section, a person's age at retirement shall be deemed to be increased by an equal period.

The creditable service established under this Section may be used for all purposes under this Article and the Retirement Systems Reciprocal Act, except for the purposes of Section 17-116.1, and the determination of average salary or compensation under this or any other Article of this Code.

The age enhancement established under this Section may be used for all purposes under this Article (including calculation of a proportionate pension payable by this Fund under the Retirement Systems Reciprocal Act), except for purposes of the reversionary pension under Section 17-120, and distributions required by federal law on account of age. However, age enhancement established under this Section shall not be used in determining benefits payable under other Articles of this Code under the Retirement Systems Reciprocal Act.

(c) For all creditable service established under this Section, the employer must pay to the Fund an employer contribution consisting of 12% of the member's highest annual full-time rate of compensation for each year of creditable service granted under this Section.

The employer contribution shall be paid to the Fund in one of the following ways: (i) in a single sum at the time of the member's retirement, (ii) in equal quarterly installments over a period of 5 years from the date of retirement, or (iii) subject to the approval of the Board of the Fund, in unequal installments over a period of no more than 5 years from the date of retirement, as provided in a payment plan designed by the Fund to accommodate the needs of the employer. The employer's failure to make the required contributions in a timely manner shall not affect the payment of the retirement pension.

For all creditable service established under this Section, the employee must pay to the Fund an employee contribution consisting of 4% of the member's highest annual salary rate used in the determination of the retirement pension for each year of creditable service granted under this Section. The employee contribution shall be deducted from the retirement annuity in 24 monthly installments.

(d) An annuitant who has received any age enhancement or creditable service under this Section and whose pension is suspended or cancelled under Section 17-149 or 17-150 shall thereby forfeit the age enhancement and creditable service. The forfeiture of creditable service under this subsection shall not entitle the employer to a refund of the employer contribution paid under this Section, nor to forgiveness of any part of that contribution that remains unpaid. The forfeiture of creditable service under this subsection shall not entitle the employee to a refund of the employee contribution paid under this Section.

(e) If the number of employees of an employer that apply for early retirement under this Section exceeds 30% of those eligible, the employer may require that, for any or all of the number of applicants in excess of that 30%, the starting date of the retirement pension enhanced under this Section be no earlier than June 1, 2008 and no later than September 1, 2008. The right to have the retirement pension begin before June 1, 2008 shall be allocated among the applicants on the basis of seniority in the service of that employer. This delay applies only to persons who are applying for early retirement incentives under this Section, and does not prevent a person whose application for early retirement incentives has been withdrawn from beginning to receive a retirement pension on the earliest date upon which the person is otherwise eligible under this Article.

(f) For a member who receives notice that he or she has been declared a reserve teacher pursuant to a collective bargaining agreement after January 15, 2008, but before September 15, 2008: (1) the March 1, 2008 application deadline in subdivision (a)(4) of this Section is extended to a date 15 days after the date of notification of the reserve teacher declaration, (2) the June 30, 2008 deadline in subdivision (a)(5) of this Section is extended to October 1, 2008, and (3) the member shall not be included in the calculation of the 30% under subsection (e) and is not subject to delay in retirement under that subsection.

(g) A member who receives any early retirement incentive under Section 17-116.3, 17-116.4, 17-116.5, 17-116.6, or 17-116.8 may not receive any early retirement incentive under this Section.

(40 ILCS 5/17-116.8 new)

Sec. 17-116.8. Early retirement incentives.

(a) To be eligible for the benefits provided in this Section, a person must:

(1) be a member of this Fund who, on November 1, 2008, is (i) in active payroll status as a teacher, or (ii) on layoff status from such a position with a right of re-employment or recall to service, or (iii) on leave of absence from such a position, but only if the member on leave has not been receiving a disability benefit under this Article for a continuous period of 2 years or more as of the date of application;

(2) be a member of this Fund who, on or after May 1, 2008, is (i) in active payroll status as a teacher, or (ii) on layoff status from such a position with a right of re-employment or recall to service, or (iii) on leave of absence from such a position, but only if the member on leave has not been receiving a disability benefit under this Article for a continuous period of 2 years or more as of the date of application;

(3) have not previously received a retirement pension under this Article;

(4) file with the Board and the Board of Education, before March 1, 2009, a written application requesting the benefits provided in this Section and a notice of resignation from employment, which resignation must take effect no earlier than February 1, 2009 and no later than June 30, 2009, unless the applicant's retirement is delayed under subsection (e) or (f) of this Section;

(5) be eligible to receive a retirement pension under this Article (for which purpose any age enhancement or creditable service received under this Section may be used) and elect to receive the retirement pension beginning no earlier than February 1, 2009 and no later than June 30, 2009 or the date established under subsection (e) or (f) of this Section, if applicable;

(6) have attained age 50 (without the use of any age enhancement or creditable service received under this Section) by the effective date of the retirement pension;

(7) have at least 5 years of creditable service under this Fund or any of the participating systems under the Retirement Systems Reciprocal Act (without the use of any creditable service received under this Section) by the effective date of the retirement pension.

(b) An eligible person may establish up to 5 years of creditable service under this Section. In addition, for each period of creditable service established under this Section, a person's age at retirement shall be deemed to be increased by an equal period.

(c) For all creditable service established under this Section, the employer must pay to the Fund an employer contribution consisting of 12% of the member's highest annual full-time rate of compensation for each year of creditable service granted under this Section.

The employer contribution shall be paid to the Fund in one of the following ways: (i) in a single sum at the time of the member's retirement, (ii) in equal quarterly installments over a period of 5 years from the date of retirement, or (iii) subject to the approval of the Board of the Fund, in unequal installments over a period of no more than 5 years from the date of retirement, as provided in a payment plan designed by the Fund to accommodate the needs of the employer. The employer's failure to make the required contributions in a timely manner shall not affect the payment of the retirement pension.

For all creditable service established under this Section, the employee must pay to the Fund an employee contribution consisting of 4% of the member's highest annual salary rate used in the determination of the retirement pension for each year of creditable service granted under this Section. The employee contribution shall be deducted from the retirement annuity in 24 monthly installments.

(d) An annuitant who has received any age enhancement or creditable service under this Section and whose pension is suspended or cancelled under Section 17-149 or 17-150 shall thereby forfeit the age enhancement and creditable service. The forfeiture of creditable service under this subsection shall not entitle the employer to a refund of the employer contribution paid under this Section, nor to forgiveness of any part of that contribution that remains unpaid. The forfeiture of creditable service under this subsection shall not entitle the employee to a refund of the employee contribution paid under this Section.

(e) If the number of employees of an employer that apply for early retirement under this Section exceeds 30% of those eligible, the employer may require that, for any or all of the number of applicants in excess of that 30%, the starting date of the retirement pension enhanced under this Section be no earlier than June 1, 2009 and no later than September 1, 2009. The right to have the retirement pension begin before June 1, 2009 shall be allocated among the applicants on the basis of seniority in the service of that employer. This delay applies only to persons who are applying for early retirement incentives under this Section, and does not prevent a person whose application for early retirement incentives has been withdrawn from beginning to receive a retirement pension on the earliest date upon which the person is otherwise eligible under this Article.

(f) For a member who receives notice that he or she has been declared a reserve teacher pursuant to a collective bargaining agreement after January 15, 2009, but before September 15, 2009: (1) the March 1, 2009 application deadline in subdivision (a)(4) of this Section is extended to a date 15 days after the date of notification of the reserve teacher declaration, (2) the June 30, 2009 deadline in subdivision (a)(5) of this Section is extended to October 1, 2009, and (3) the member shall not be included in the calculation of the 30% under subsection (e) and is not subject to delay in retirement under that subsection.

(g) A member who receives any early retirement incentive under Section 17-116.3, 17-116.4, 17-116.5, 17-116.6, or 17-116.7 may not receive any early retirement incentive under this Section.

Section 90. The State Mandates Act is amended by adding Section 8.31 as follows:

(30 ILCS 805/8.31 new)

Sec. 8.31. Exempt mandate. Notwithstanding Sections 6 and 8 of this Act, no reimbursement by the State is required for the implementation of any mandate created by this amendatory Act of the 95th General Assembly.

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