093_SB1103sam002











                                     LRB093 10710 EFG 13327 a

 1                    AMENDMENT TO SENATE BILL 1103

 2        AMENDMENT NO.     .  Amend Senate Bill 1103 by  replacing
 3    everything after the enacting clause with the following:

 4        "Section  5.   The  Illinois  Pension  Code is amended by
 5    changing Sections 7-141, 7-142, and 7-173 and adding  Section
 6    7-173.3 as follows:

 7        (40 ILCS 5/7-141) (from Ch. 108 1/2, par. 7-141)
 8        Sec.   7-141.    Retirement   annuities   -   Conditions.
 9    Retirement  annuities  shall  be  payable  as hereinafter set
10    forth:
11        (a)  A participating employee who, regardless  of  cause,
12    is   separated   from   the   service  of  all  participating
13    municipalities    and    instrumentalities    thereof     and
14    participating   instrumentalities  shall  be  entitled  to  a
15    retirement annuity provided:
16             1.  He is at least age 55,  or  in  the  case  of  a
17        person  who  is  eligible  to have his annuity calculated
18        under  Section  7-142.1,  he  is  at  least  age  50,  or
19        beginning July 1, 2003, he is of an age which, when added
20        to the number of years of his creditable service,  equals
21        at least 85;
22             2.  He  is  (i)  an employee who was employed by any
 
                            -2-      LRB093 10710 EFG 13327 a
 1        participating     municipality      or      participating
 2        instrumentality  which had not elected to exclude persons
 3        employed in positions normally requiring  performance  of
 4        duty for less than 1000 hours per year or was employed in
 5        a position normally requiring performance of duty for 600
 6        hours  or  more  per  year  prior to such election by any
 7        participating      municipality     or      participating
 8        instrumentality  included  in and subject to this Article
 9        on or before the effective date of this amendatory Act of
10        1981 which made such election  and  is  not  entitled  to
11        receive  earnings  for  employment in a position normally
12        requiring performance of duty for 600 hours or  more  per
13        year    for    any    participating    municipality   and
14        instrumentalities     thereof      and      participating
15        instrumentality;  or  (ii)  an  employee who was employed
16        only by a  participating  municipality  or  participating
17        instrumentality,   or   participating  municipalities  or
18        participating instrumentalities, which  have  elected  to
19        exclude   persons   in   positions   normally   requiring
20        performance  of  duty  for  less than 1000 hours per year
21        after the effective date of such exclusion or  which  are
22        included  under  and  subject  to  the  Article after the
23        effective date of this amendatory Act of 1981 and  elects
24        to exclude persons in such positions, and is not entitled
25        to receive earnings for employment in a position normally
26        requiring  performance of duty for 1000 hours or more per
27        year   by   such   a   participating   municipality    or
28        participating instrumentality;
29             3.  The   amount   of   his   annuity,   before  the
30        application of paragraph (b) of Section 7-142 is at least
31        $10 per month;
32             4.  If he  first  became  a  participating  employee
33        after  December  31,  1961,  he  has  at least 8 years of
34        service.  This service requirement shall not apply to any
 
                            -3-      LRB093 10710 EFG 13327 a
 1        participating employee, regardless of participation date,
 2        if the General Assembly terminates the Fund.
 3        (b)  Retirement annuities shall be payable:
 4             1.  As provided in Section 7-119;
 5             2.  Except as provided in item 3,  upon  receipt  by
 6        the  fund  of  a written application.  The effective date
 7        may be not more than one year prior to the  date  of  the
 8        receipt by the fund of the application;
 9             3.  Upon  attainment of age 70 1/2 if the member (i)
10        is no longer in service, and (ii) is  otherwise  entitled
11        to an annuity under this Article;
12             4.  To the beneficiary of the deceased annuitant for
13        the unpaid amount accrued to date of death, if any.
14    (Source: P.A. 91-887, eff. 7-6-00.)

15        (40 ILCS 5/7-142) (from Ch. 108 1/2, par. 7-142)
16        Sec. 7-142.  Retirement annuities - Amount.
17        (a)  The  amount of a retirement annuity shall be the sum
18    of the following, determined in accordance with the actuarial
19    tables in effect at the time of the grant of the annuity:
20             1.  For employees with 8 or more years  of  service,
21        an  annuity  computed pursuant to subparagraphs a or b of
22        this subparagraph 1, whichever is  the  higher,  and  for
23        employees  with  less than 8 years of service the annuity
24        computed pursuant to subparagraph a:
25                  a.  The monthly annuity which can  be  provided
26             from  the total accumulated normal, municipality and
27             prior service credits, as of the attained age of the
28             employee on the date  the  annuity  begins  provided
29             that  such annuity shall not exceed 75% of the final
30             rate of earnings of the employee.
31                  b.(i)  The monthly annuity amount determined as
32             follows:
33                  (i)  For unaugmented creditable service  earned
 
                            -4-      LRB093 10710 EFG 13327 a
 1             before  July  1, 2003, by multiplying (a) 1 2/3% for
 2             annuitants with not more than 15 years or (b) 1 2/3%
 3             of the employee's final rate of earnings for each of
 4             the first 15 years of creditable service and 2%  for
 5             each  year in excess of 15 years, with any remaining
 6             fraction of a year for annuitants with more than  15
 7             years  by the number of years plus fractional years,
 8             prorated on the a  basis  of  months  of  creditable
 9             service  and  multiply  the  product  thereof by the
10             employee's final rate of earnings.
11                  For creditable service earned on or after  July
12             1,  2003  and  creditable service earned before that
13             date that has been augmented as provided in  Section
14             7-173.3,   2.15%  of  the  employee's  final rate of
15             earnings for each year of creditable  service,  with
16             any  remaining  fraction  of  a year prorated on the
17             basis of months.
18                  (ii)  For the sole  purpose  of  computing  the
19             formula (and not for the purposes of the limitations
20             hereinafter  stated)  $125  shall  be considered the
21             final rate of earnings in all cases where the  final
22             rate of earnings is less than such amount.
23                  (iii)  The    monthly   annuity   computed   in
24             accordance  with  this  subparagraph  b,  shall  not
25             exceed an amount equal to 75% of the final  rate  of
26             earnings.
27                  (iv)  For employees who have less than 35 years
28             of  service, the annuity computed in accordance with
29             this subparagraph b (as reduced  by  application  of
30             subparagraph  (iii) above) shall be reduced by 0.25%
31             thereof  (0.5%  if  service  was  terminated  before
32             January 1, 1988) for each month or fraction  thereof
33             (1)  that  the employee's age is less than 60 years,
34             or (2) if the employee has  at  least  30  years  of
 
                            -5-      LRB093 10710 EFG 13327 a
 1             service  credit,  that the employee's service credit
 2             is less than 35 years, whichever  is  less,  on  the
 3             date  the  annuity  begins.  Beginning July 1, 2003,
 4             the reduction in this  subparagraph  (iv)  does  not
 5             apply  to  an  employee whose age, when added to the
 6             number of years of his creditable service, equals at
 7             least 85.
 8             2.  The annuity which can be provided from the total
 9        accumulated additional credits as of the attained age  of
10        the employee on the date the annuity begins.
11        (b)  If  payment  of  an  annuity  begins  prior  to  the
12    earliest  age  at which the employee will become eligible for
13    an  old  age  insurance  benefit  under  the  Federal  Social
14    Security Act, he may elect that  the  annuity  payments  from
15    this fund shall exceed those payable after his attaining such
16    age  by  an  amount,  computed  as determined by rules of the
17    Board, but not in excess of  his  estimated  Social  Security
18    Benefit,  determined as of the effective date of the annuity,
19    provided that in no case shall  the  total  annuity  payments
20    made by this fund exceed in actuarial value the annuity which
21    would have been payable had no such election been made.
22        (c)  The  retirement annuity shall be increased each year
23    by 2%, not compounded, of  the  monthly  amount  of  annuity,
24    taking  into consideration any adjustment under paragraph (b)
25    of this  Section.  This  increase  shall  be  effective  each
26    January  1  and  computed  from  the  effective  date  of the
27    retirement annuity, the first increase  being  .167%  of  the
28    monthly  amount times the number of months from the effective
29    date to January 1. Beginning January 1, 1984 and  thereafter,
30    the  retirement  annuity  shall be increased by 3% each year,
31    not compounded. This increase  shall  not  be  applicable  to
32    annuitants  who  are  not in service on or after September 8,
33    1971.
34    (Source: P.A. 91-357, eff. 7-29-99.)
 
                            -6-      LRB093 10710 EFG 13327 a
 1        (40 ILCS 5/7-173) (from Ch. 108 1/2, par. 7-173)
 2        Sec. 7-173. Contributions by employees.
 3        (a)  Each participating employee shall make contributions
 4    to the fund as follows:
 5             1.  For   retirement   annuity   purposes,    normal
 6        contributions  of  3 3/4%  of  earnings  through June 30,
 7        2003, and 4.25% of earnings thereafter.
 8             2.  Additional contributions of such percentages  of
 9        each  payment  of  earnings,  as  shall be elected by the
10        employee for retirement  annuity  purposes,  but  not  in
11        excess  of 10%.  The selected rate shall be applicable to
12        all earnings beginning on the first  day  of  the  second
13        month following receipt by the Board of written notice of
14        election   to   make   such   contributions.   Additional
15        contributions  at  the  selected  rate  shall   be   made
16        concurrently with normal contributions.
17             3.  Survivor  contributions,  by  each participating
18        employee, of 3/4% of each payment of earnings.
19        (b)  Each employee shall make contributions to  the  fund
20    for  federal  Social Security taxes, for periods during which
21    he is a covered employee, as required by the Social  Security
22    Enabling    Act.     For    participating   employees,   such
23    contributions shall be in addition to  those  required  under
24    paragraph (a) of this Section.
25        (c)  Contributions    shall   be   deducted   from   each
26    corresponding payment of earnings paid to each  employee  and
27    shall   be   remitted  to  the  board  by  the  participating
28    municipality or  participating  instrumentality  making  such
29    payment.   The  remittance,  together  with  a  report of the
30    earnings and contributions shall be made as directed  by  the
31    board.   For  township  treasurers  and employees of township
32    treasurers   qualifying   as   employees    hereunder,    the
33    contributions herein required as deductions from salary shall
34    be  withheld  by  the  school  township  trustees  from funds
 
                            -7-      LRB093 10710 EFG 13327 a
 1    available  for  the  payment  of  the  compensation  of  such
 2    treasurers and employees as provided in the School  Code  and
 3    remitted to the board.
 4        (d)  An  employee  who  has made additional contributions
 5    under paragraph (a)2 of this Section may upon  retirement  or
 6    at  any  time  prior  thereto, elect to withdraw the total of
 7    such additional  contributions  including  interest  credited
 8    thereon to the end of the preceding calendar year.
 9        (e)  Failure   to   make   the  deductions  for  employee
10    contributions provided in paragraph (c) of this Section shall
11    not  relieve   the   employee   from   liability   for   such
12    contributions.  The amount of such liability may be deducted,
13    with interest charged under Section 7-209, from any annuities
14    or  benefits  payable  hereunder to the employee or any other
15    person receiving an annuity or  benefit  by  reason  of  such
16    employee's participation.
17        (f)  A  participating  employee who has at least 40 years
18    of creditable service in the Fund may elect to  cease  making
19    the contributions required under this Section.  The status of
20    the  employee  under this Article shall be unaffected by this
21    election, except that the  employee  shall  not  receive  any
22    additional  creditable  service for the periods of employment
23    following the election.  An election  under  this  subsection
24    relieves   the   employer  from  making  additional  employer
25    contributions in relation to that employee.
26    (Source: P.A. 87-1265.)

27        (40 ILCS 5/7-173.3 new)
28        Sec.  7-173.3.  Optional   contribution   for   augmented
29    retirement formula.
30        (a)  A  member  of the Fund may qualify for the augmented
31    rate under subdivision (a)1.b.(i) of Section  7-142  for  all
32    years  of  creditable  service  earned before July 1, 2003 by
33    making the optional contribution specified in subsection  (b)
 
                            -8-      LRB093 10710 EFG 13327 a
 1    of  this  Section.  A member may not elect to qualify for the
 2    augmented rate for only a portion of his  or  her  creditable
 3    service earned before July 1, 2003.
 4        (b)  The  contribution  shall be an amount equal to 0.51%
 5    of the member's highest salary  rate  in  the  4  consecutive
 6    years  immediately  prior  to  but  not including the year in
 7    which the application occurs, multiplied  by  the  number  of
 8    years  of creditable service earned by the member before July
 9    1, 2003.
10        The contribution required by  this  subsection  shall  be
11    paid  in one of the following ways or in a combination of the
12    following ways that does not extend over more than 5 years:
13             (i)  in  a  lump  sum  on  or  before  the  date  of
14        retirement;
15             (ii)  in substantially  equal  installments  over  a
16        period of time not to exceed 5 years, as a deduction from
17        salary;
18             (iii)  if  the  member  becomes  an  annuitant on or
19        before June 30,  2007,  in  substantially  equal  monthly
20        installments  over  a  24-month  period,  by reducing the
21        annuitant's monthly benefit over a 24-month period by the
22        amount of the  otherwise  applicable  contribution.   For
23        federal  and Illinois tax purposes, the monthly amount by
24        which the annuitant's benefit is  reduced  shall  not  be
25        treated as a contribution by the annuitant, but rather as
26        a reduction of the annuitant's monthly benefit.
27        (c)  If  the  member  fails to make the full contribution
28    under this Section in a timely  fashion,  the  payments  made
29    under  this  Section shall be refunded to the member, without
30    interest.   If  the  member  dies  before  making  the   full
31    contribution,  the payments made under this Section, together
32    with regular interest  thereon,  shall  be  refunded  to  the
33    member's designated beneficiary.
34        (d)  For  purposes  of  this  Section  and the retirement
 
                            -9-      LRB093 10710 EFG 13327 a
 1    formula  in  Section  7-142,  optional   creditable   service
 2    established  by  a member shall be deemed to have been earned
 3    at the time of the employment or other qualifying event  upon
 4    which  the  service  is  based,  rather  than at the time the
 5    credit was established in this Fund.
 6        (e)  The contributions required under  this  Section  are
 7    the  responsibility  of  the  employee  and not the employer.
 8    However,  an  employer  may   specifically   agree,   through
 9    collective bargaining or otherwise, to make the contributions
10    required by this Section on behalf of its employees.

11        Section  90.  The State Mandates Act is amended by adding
12    Section 8.27 as follows:

13        (30 ILCS 805/8.27 new)
14        Sec. 8.27. Exempt mandate.   Notwithstanding  Sections  6
15    and  8 of this Act, no reimbursement by the State is required
16    for  the  implementation  of  any  mandate  created  by  this
17    amendatory Act of the 93rd General Assembly.

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