Full Text of HB0804 95th General Assembly
HB0804 95TH GENERAL ASSEMBLY
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95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008 HB0804
Introduced 2/7/2007, by Rep. Jack McGuire SYNOPSIS AS INTRODUCED: |
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40 ILCS 5/7-139 |
from Ch. 108 1/2, par. 7-139 |
30 ILCS 805/8.31 new |
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Amends the IMRF Article of the Illinois Pension Code. Increases the amount of creditable service a participating employee may be granted for service in the armed forces of the United States from 24 months to 48 months. Provides that, if payment is made during
the 6-month period that begins one month after the effective date, the required interest shall be at the rate of 2.5%
per year, compounded annually; otherwise, the required interest shall be
calculated at the regular interest rate. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.
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FISCAL NOTE ACT MAY APPLY |
PENSION IMPACT NOTE ACT MAY APPLY |
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT |
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A BILL FOR
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HB0804 |
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LRB095 10606 AMC 30828 b |
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| AN ACT concerning public employee benefits.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Pension Code is amended by changing | 5 |
| Section 7-139 as follows:
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| (40 ILCS 5/7-139) (from Ch. 108 1/2, par. 7-139)
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| Sec. 7-139. Credits and creditable service to employees.
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| (a) Each participating employee shall be granted credits | 9 |
| and creditable
service, for purposes of determining the amount | 10 |
| of any annuity or benefit
to which he or a beneficiary is | 11 |
| entitled, as follows:
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| 1. For prior service: Each participating employee who | 13 |
| is an employee
of a participating municipality or | 14 |
| participating instrumentality on the
effective date shall | 15 |
| be granted creditable service, but no credits under
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| paragraph 2 of this subsection (a), for periods of prior | 17 |
| service for which
credit has not been received under any | 18 |
| other pension fund or retirement system
established under | 19 |
| this Code, as follows:
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| If the effective date of participation for the | 21 |
| participating municipality
or participating | 22 |
| instrumentality is on or before January 1, 1998, creditable
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| service shall be granted for the entire period of prior |
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| service with that
employer without any employee | 2 |
| contribution.
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| If the effective date of participation for the | 4 |
| participating municipality
or participating | 5 |
| instrumentality is after January 1, 1998, creditable
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| service shall be granted for the last 20% of the period of | 7 |
| prior service with
that employer, but no more than 5 years, | 8 |
| without any employee contribution. A
participating | 9 |
| employee may establish creditable service for the | 10 |
| remainder of
the period of prior service with that employer | 11 |
| by making an application in
writing, accompanied by payment | 12 |
| of an employee contribution in an
amount determined by the | 13 |
| Fund, based on the employee contribution rates in
effect at | 14 |
| the time of application for the creditable service and the | 15 |
| employee's
salary rate on the effective date of | 16 |
| participation for that employer, plus
interest at the | 17 |
| effective rate from the date of the prior service to the | 18 |
| date
of payment. Application for this creditable service | 19 |
| may be made at any time
while the employee is still in | 20 |
| service.
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| A municipality that (i) has at least 35 employees; (ii) | 22 |
| is located in a county with at least 2,000,000 inhabitants; | 23 |
| and (iii) maintains an independent defined benefit pension | 24 |
| plan for the benefit of its eligible employees may restrict | 25 |
| creditable service in whole or in part for periods of prior | 26 |
| service with the employer if the governing body of the |
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| municipality adopts an irrevocable resolution to restrict | 2 |
| that creditable service and files the resolution with the | 3 |
| board before the municipality's effective date of | 4 |
| participation.
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| Any person who has withdrawn from the service of a | 6 |
| participating
municipality
or participating | 7 |
| instrumentality prior to the effective date, who reenters
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| the service of the same municipality or participating | 9 |
| instrumentality after
the effective date and becomes a | 10 |
| participating employee is entitled to
creditable service | 11 |
| for prior service as otherwise provided in this
subdivision | 12 |
| (a)(1) only if he or she renders 2 years of service as a
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| participating employee after the effective date. | 14 |
| Application
for such service must be made while in a | 15 |
| participating status.
The salary rate to be used in the | 16 |
| calculation of the required employee
contribution, if any, | 17 |
| shall be the employee's salary rate at the time of first
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| reentering service with the employer after the employer's | 19 |
| effective date of
participation.
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| 2. For current service, each participating employee | 21 |
| shall be
credited with:
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| a. Additional credits of amounts equal to each | 23 |
| payment of additional
contributions received from him | 24 |
| under Section 7-173, as of the
date the corresponding | 25 |
| payment of earnings is payable to him.
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| b. Normal credits of amounts equal to each payment |
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| of normal
contributions received from him, as of the | 2 |
| date the corresponding payment of
earnings is payable | 3 |
| to him, and normal contributions made for the purpose | 4 |
| of
establishing out-of-state service credits as | 5 |
| permitted under the conditions set
forth in paragraph 6 | 6 |
| of this subsection (a).
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| c. Municipality credits in an amount equal to 1.4 | 8 |
| times the normal
credits, except those established by | 9 |
| out-of-state service credits, as of
the date of | 10 |
| computation of any benefit if these credits would | 11 |
| increase
the benefit.
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| d. Survivor credits equal to each payment of | 13 |
| survivor contributions
received from the participating | 14 |
| employee as of the date the
corresponding payment of | 15 |
| earnings is payable, and survivor contributions made
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| for the purpose of establishing out-of-state service | 17 |
| credits.
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| 3. For periods of temporary and total and permanent | 19 |
| disability
benefits, each employee receiving disability | 20 |
| benefits shall be granted
creditable service for the period | 21 |
| during which disability benefits are
payable. Normal and | 22 |
| survivor credits, based upon the rate of earnings
applied | 23 |
| for disability benefits, shall also be granted if such | 24 |
| credits
would result in a higher benefit to any such | 25 |
| employee or his
beneficiary.
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| 4. For authorized leave of absence without pay: A |
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| participating
employee shall be granted credits and | 2 |
| creditable service for periods of
authorized leave of | 3 |
| absence without pay under the following
conditions:
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| a. An application for credits and creditable | 5 |
| service is submitted to the
board while the employee is | 6 |
| in a status of
active employment, and within 2 years | 7 |
| after termination of the
leave of absence period for | 8 |
| which credits and creditable service are
sought.
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| b. Not more than 12 complete months of creditable | 10 |
| service
for authorized leave of absence without pay | 11 |
| shall be counted for purposes of
determining any | 12 |
| benefits payable under this Article.
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| c. Credits and creditable service shall be granted | 14 |
| for leave of
absence only if such leave is approved by | 15 |
| the governing body of the
municipality, including | 16 |
| approval of the estimated cost thereof to the
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| municipality as determined by the fund, and employee | 18 |
| contributions, plus
interest at the effective rate | 19 |
| applicable for each year from the end of
the period of | 20 |
| leave to date of payment, have been paid to the fund in
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| accordance with Section 7-173. The contributions shall | 22 |
| be computed upon the
assumption earnings continued | 23 |
| during the period of leave at the rate in
effect when | 24 |
| the leave began.
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| d. Benefits under the provisions of Sections | 26 |
| 7-141, 7-146, 7-150
and 7-163 shall become payable to |
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| employees on authorized leave of
absence, or their | 2 |
| designated beneficiary, only if such leave of absence
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| is creditable hereunder, and if the employee has at | 4 |
| least one year of
creditable service other than the | 5 |
| service granted for leave of absence.
Any employee | 6 |
| contributions due may be deducted from any benefits
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| payable.
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| e. No credits or creditable service shall be | 9 |
| allowed for leave of
absence without pay during any | 10 |
| period of prior service.
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| 5. For military service: The governing body of a | 12 |
| municipality or
participating instrumentality may elect to | 13 |
| allow creditable service to
participating employees who | 14 |
| leave their employment to serve in the armed
forces of the | 15 |
| United States for all periods of such service, provided
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| that the person returns to active employment within 90 days | 17 |
| after
completion
of full time active duty, but no | 18 |
| creditable service shall be allowed such
person for any | 19 |
| period that can be used in the computation of a pension
or | 20 |
| any other pay or benefit, other than pay for active duty, | 21 |
| for service
in any branch of the armed forces of the United | 22 |
| States. If necessary to
the computation of any benefit, the | 23 |
| board shall establish municipality
credits for | 24 |
| participating employees under this paragraph on the
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| assumption that the employee received earnings at the rate | 26 |
| received at
the time he left the employment to enter the |
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| armed forces. A
participating employee in the armed forces | 2 |
| shall not be considered an
employee during such period of | 3 |
| service and no additional death and no
disability benefits | 4 |
| are payable for death or disability during such period.
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| Any participating employee who left his employment | 6 |
| with a
municipality or participating instrumentality to | 7 |
| serve in the armed
forces of the United States and who | 8 |
| again became a participating
employee within 90 days after | 9 |
| completion of full time active duty by
entering the service | 10 |
| of a different municipality or participating
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| instrumentality, which has elected to allow creditable | 12 |
| service for
periods of military service under the preceding | 13 |
| paragraph, shall also be
allowed creditable service for his | 14 |
| period of military service on the
same terms that would | 15 |
| apply if he had been employed, before entering
military | 16 |
| service, by the municipality or instrumentality which | 17 |
| employed
him after he left the military service and the | 18 |
| employer costs arising in
relation to such grant of | 19 |
| creditable service shall be charged to and
paid by that | 20 |
| municipality or instrumentality.
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| Notwithstanding the foregoing, any participating | 22 |
| employee
shall be entitled to creditable service as | 23 |
| required by any federal law
relating to re-employment | 24 |
| rights of persons who served in the United States
Armed | 25 |
| Services. Such creditable service shall be granted upon | 26 |
| payment by
the member of an amount equal to the employee |
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LRB095 10606 AMC 30828 b |
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| contributions which would
have been required had the | 2 |
| employee continued in service at the same
rate of earnings | 3 |
| during the military leave period, plus interest at
the | 4 |
| effective rate.
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| 5.1. In addition to any creditable service established | 6 |
| under
paragraph 5 of this subsection (a), creditable | 7 |
| service may be granted for
up to 48
24 months of service in | 8 |
| the armed forces of the United States.
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| In order to receive creditable service for military | 10 |
| service under this
paragraph 5.1, a participating employee | 11 |
| must (1) apply to the Fund
in writing and provide evidence | 12 |
| of the military service that is satisfactory
to the Board; | 13 |
| (2) obtain the written approval of the current employer; | 14 |
| and (3)
make contributions to the Fund equal to (i)
the | 15 |
| employee contributions that would have been required had | 16 |
| the service been
rendered as a member, plus (ii) an amount | 17 |
| determined by the board to be equal
to the employer's | 18 |
| normal cost of the benefits accrued for that military
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| service, plus (iii) interest on items (i) and (ii) from the | 20 |
| date of first
membership in the Fund to the date of | 21 |
| payment. If payment is made during
the 6-month period that | 22 |
| begins one month
3 months after the effective date of this
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| amendatory Act of the 95th General Assembly
1997 , the | 24 |
| required interest shall be at the rate of 2.5%
per year, | 25 |
| compounded annually; otherwise, the required interest | 26 |
| shall be
calculated at the regular interest rate.
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LRB095 10606 AMC 30828 b |
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| The changes made to this paragraph 5.1 by this | 2 |
| amendatory Act of the 95th General Assembly apply only to | 3 |
| participating employees in service on or after its | 4 |
| effective date.
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| 6. For out-of-state service: Creditable service shall | 6 |
| be granted for
service rendered to an out-of-state local | 7 |
| governmental body under the
following conditions: The | 8 |
| employee had participated and has irrevocably
forfeited | 9 |
| all rights to benefits in the out-of-state public employees
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| pension system; the governing body of his participating | 11 |
| municipality or
instrumentality authorizes the employee to | 12 |
| establish such service; the
employee has 2 years current | 13 |
| service with this municipality or
participating | 14 |
| instrumentality; the employee makes a payment of
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| contributions, which shall be computed at 8% (normal) plus | 16 |
| 2% (survivor)
times length of service purchased times the | 17 |
| average rate of earnings for the
first 2
years of service | 18 |
| with the municipality or participating
instrumentality | 19 |
| whose governing body authorizes the service established
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| plus interest at the effective rate on the date such | 21 |
| credits are
established, payable from the date the employee | 22 |
| completes the required 2
years of current service to date | 23 |
| of payment. In no case shall more than
120 months of | 24 |
| creditable service be granted under this provision.
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| 7. For retroactive service: Any employee who could have | 26 |
| but did not
elect to become a participating employee, or |
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| who should have been a
participant in the Municipal Public | 2 |
| Utilities Annuity and Benefit Fund
before that fund was | 3 |
| superseded, may receive creditable service for the
period | 4 |
| of service not to exceed 50 months; however, a current or | 5 |
| former
elected or appointed official of a participating | 6 |
| municipality may establish credit under this paragraph 7 | 7 |
| for more than 50
months of service as an official of that | 8 |
| municipality, if the excess over 50 months is approved by | 9 |
| resolution of the
governing body of the affected | 10 |
| municipality filed with
the Fund before January 1, 2002.
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| Any employee who is a
participating employee on or | 12 |
| after September 24, 1981 and who was
excluded from | 13 |
| participation by the age restrictions removed by Public Act
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| 82-596 may receive creditable service for the period, on or | 15 |
| after January
1, 1979, excluded by the age restriction and, | 16 |
| in addition, if the governing
body of the participating | 17 |
| municipality or participating instrumentality elects
to | 18 |
| allow creditable service for all employees excluded by the | 19 |
| age restriction
prior to January 1, 1979, for service | 20 |
| during the period prior to that date
excluded by the age | 21 |
| restriction. Any employee who was excluded from
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| participation by the age restriction removed by Public Act | 23 |
| 82-596 and who is
not a participating employee on or after | 24 |
| September 24, 1981 may receive
creditable service for | 25 |
| service after January 1,
1979. Creditable service under | 26 |
| this paragraph
shall be granted upon payment of the |
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LRB095 10606 AMC 30828 b |
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| employee contributions
which would have been required had | 2 |
| he participated, with interest at the
effective rate for | 3 |
| each year from the end of the period of service
established | 4 |
| to date of payment.
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| 8. For accumulated unused sick leave: A participating | 6 |
| employee who is
applying for a retirement annuity shall be | 7 |
| entitled to creditable service
for that portion of the | 8 |
| employee's accumulated unused sick leave
for which payment | 9 |
| is not received, as follows:
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| a. Sick leave days shall be limited to those | 11 |
| accumulated under a sick
leave plan established by a | 12 |
| participating municipality or participating
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| instrumentality which is available to all employees or | 14 |
| a class of employees.
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| b. Only sick leave days accumulated with a | 16 |
| participating municipality or
participating | 17 |
| instrumentality with which the employee was in service | 18 |
| within
60 days of the effective date of his retirement | 19 |
| annuity shall be credited;
If the employee was in | 20 |
| service with more than one employer during this
period | 21 |
| only the sick leave days with the employer with which | 22 |
| the employee
has the greatest number of unpaid sick | 23 |
| leave days shall be considered.
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| c. The creditable service granted shall be | 25 |
| considered solely for the
purpose of computing the | 26 |
| amount of the retirement annuity and shall not be
used |
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LRB095 10606 AMC 30828 b |
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| to establish any minimum service period required by any | 2 |
| provision of the
Illinois Pension Code, the effective | 3 |
| date of the retirement annuity, or the
final rate of | 4 |
| earnings.
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| d. The creditable service shall be at the rate of | 6 |
| 1/20 of a month for
each full sick day, provided that | 7 |
| no more than 12 months may be credited
under this | 8 |
| subdivision 8.
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| e. Employee contributions shall not be required | 10 |
| for creditable service
under this subdivision 8.
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| f. Each participating municipality and | 12 |
| participating instrumentality
with which an employee | 13 |
| has service within 60 days of the effective date of
his | 14 |
| retirement annuity shall certify to the board the | 15 |
| number of accumulated
unpaid sick leave days credited | 16 |
| to the employee at the time of termination
of service.
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| 9. For service transferred from another system: | 18 |
| Credits and
creditable service shall be granted for service | 19 |
| under Article 3, 4, 5, 14
or 16 of this Act, to any active | 20 |
| member of this Fund, and to any
inactive member who has | 21 |
| been a county sheriff, upon
transfer of such credits | 22 |
| pursuant to Section 3-110.3, 4-108.3, 5-235,
14-105.6 or | 23 |
| 16-131.4, and payment by the member of the amount by
which | 24 |
| (1) the employer and employee contributions that would have | 25 |
| been required
if he had participated in this Fund as a | 26 |
| sheriff's law enforcement employee
during the period for |
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| which credit is
being transferred, plus interest thereon at | 2 |
| the effective rate for each
year, compounded annually, from | 3 |
| the date of termination of the service for
which credit is | 4 |
| being transferred to the date of payment, exceeds (2) the
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| amount actually transferred to the Fund.
Such transferred | 6 |
| service shall be deemed to be service as a sheriff's law
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| enforcement employee for the purposes of Section 7-142.1.
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| 10. For service transferred from an Article 3 system | 9 |
| under Section 3-110.8: Credits and
creditable service | 10 |
| shall be granted for service under Article 3 of this Act as | 11 |
| provided in Section 3-110.8, to any active member of this | 12 |
| Fund upon
transfer of such credits pursuant to Section | 13 |
| 3-110.8. If the amount by
which (1) the employer and | 14 |
| employee contributions that would have been required
if he | 15 |
| had participated in this Fund during the period for which | 16 |
| credit is
being transferred, plus interest thereon at the | 17 |
| effective rate for each
year, compounded annually, from the | 18 |
| date of termination of the service for
which credit is | 19 |
| being transferred to the date of payment, exceeds (2) the
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| amount actually transferred to the Fund, then the amount of | 21 |
| creditable service established under this paragraph 10 | 22 |
| shall be reduced by a corresponding amount in accordance | 23 |
| with the rules and procedures established under this | 24 |
| paragraph 10.
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| The board shall establish by rule the manner of making | 26 |
| the calculation required under
this paragraph 10, taking |
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| into account the appropriate actuarial
assumptions; the | 2 |
| member's service, age, and salary history; the level
of | 3 |
| funding of the employer; and
any other factors that the | 4 |
| board determines to be relevant.
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| (b) Creditable service - amount:
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| 1. One month of creditable service
shall be allowed for | 7 |
| each month for which a participating employee made
| 8 |
| contributions as required under Section 7-173, or for which | 9 |
| creditable
service is otherwise granted hereunder. Not | 10 |
| more than 1 month of
service shall be credited and counted | 11 |
| for 1 calendar month, and not more
than 1 year of service | 12 |
| shall be credited and counted for any calendar
year. A | 13 |
| calendar month means a nominal month beginning on the first | 14 |
| day
thereof, and a calendar year means a year beginning | 15 |
| January 1 and ending
December 31.
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| 2. A seasonal employee shall be given 12 months of | 17 |
| creditable
service if he renders the number of months of | 18 |
| service normally required
by the position in a 12-month | 19 |
| period and he remains in service for the
entire 12-month | 20 |
| period. Otherwise a fractional year of service in the
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| number of months of service rendered shall be credited.
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| 3. An intermittent employee shall be given creditable | 23 |
| service for
only those months in which a contribution is | 24 |
| made under Section 7-173.
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| (c) No application for correction of credits or creditable | 26 |
| service shall
be considered unless the board receives an |
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| application for correction while
(1) the applicant is a | 2 |
| participating employee and in active employment
with a | 3 |
| participating municipality or instrumentality, or (2) while | 4 |
| the
applicant is actively participating in a pension fund or | 5 |
| retirement
system which is a participating system under the | 6 |
| Retirement Systems
Reciprocal Act. A participating employee or | 7 |
| other applicant shall not be
entitled to credits or creditable | 8 |
| service unless the required employee
contributions are made in | 9 |
| a lump sum or in installments made in accordance
with board | 10 |
| rule.
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| (d) Upon the granting of a retirement, surviving spouse or | 12 |
| child
annuity, a death benefit or a separation benefit, on | 13 |
| account of any
employee, all individual accumulated credits | 14 |
| shall thereupon terminate.
Upon the withdrawal of additional | 15 |
| contributions, the credits applicable
thereto shall thereupon | 16 |
| terminate. Terminated credits shall not be applied
to increase | 17 |
| the benefits any remaining employee would otherwise receive | 18 |
| under
this Article.
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| (Source: P.A. 93-933, eff. 8-13-04; 94-356, eff. 7-29-05.)
| 20 |
| Section 90. The State Mandates Act is amended by adding | 21 |
| Section 8.31 as follows: | 22 |
| (30 ILCS 805/8.31 new) | 23 |
| Sec. 8.31. Exempt mandate. Notwithstanding Sections 6 and 8 | 24 |
| of this Act, no reimbursement by the State is required for the |
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| implementation of any mandate created by this amendatory Act of | 2 |
| the 95th General Assembly.
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| Section 99. Effective date. This Act takes effect upon | 4 |
| becoming law.
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