Full Text of SB0610 95th General Assembly
SB0610 95TH GENERAL ASSEMBLY
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95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008 SB0610
Introduced 2/8/2007, by Sen. A. J. Wilhelmi SYNOPSIS AS INTRODUCED: |
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40 ILCS 5/7-142 |
from Ch. 108 1/2, par. 7-142 |
40 ILCS 5/7-173 |
from Ch. 108 1/2, par. 7-173 |
40 ILCS 5/7-173.3 new |
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Amends the IMRF Article of the Illinois Pension Code. Provides that, by filing a resolution or ordinance with the Fund, an employer may increase the regular
retirement formula to 2.25% of final earnings for the first 15 years of service and 2.5% of final earnings for each additional year of service, for service
earned on or after the filing of the resolution or ordinance. For service earned before the filing of the resolution or ordinance, authorizes
augmentation of the old retirement formula by payment of a specified
contribution. Increases the normal employee contribution rate for employees of an employer that files a resolution or ordinance to increase the regular retirement formula. Effective immediately.
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FISCAL NOTE ACT MAY APPLY | |
PENSION IMPACT NOTE ACT MAY APPLY |
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A BILL FOR
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SB0610 |
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LRB095 10697 AMC 30929 b |
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| AN ACT in relation to public employee benefits.
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| Be it enacted by the People of the State of Illinois, | 3 |
| represented in the General Assembly:
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| Section 5. The Illinois Pension Code is amended by changing | 5 |
| Sections
7-142 and 7-173 and adding Section 7-173.3 as follows:
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| (40 ILCS 5/7-142) (from Ch. 108 1/2, par. 7-142)
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| Sec. 7-142. Retirement annuities - Amount.
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| (a) The amount of a retirement annuity shall be the sum of | 9 |
| the following,
determined in accordance with the actuarial | 10 |
| tables in effect at the time of
the grant of the annuity:
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| 1. For employees with 8 or more years of service, an | 12 |
| annuity
computed pursuant to subparagraphs a or b of this | 13 |
| subparagraph 1,
whichever is the higher, and for employees | 14 |
| with less than 8 years of
service the annuity computed | 15 |
| pursuant to subparagraph a:
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| a. The monthly annuity which can be provided from | 17 |
| the total
accumulated normal, municipality and prior | 18 |
| service credits, as of the
attained age of the employee | 19 |
| on the date the annuity begins provided
that such | 20 |
| annuity shall not exceed 75% of the final rate of | 21 |
| earnings of
the employee.
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| b. (i) The monthly annuity amount determined as | 23 |
| follows :
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LRB095 10697 AMC 30929 b |
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| (i) For unaugmented creditable service,
by | 2 |
| multiplying (a) 1 2/3% for annuitants with not more | 3 |
| than 15 years or
(b) 1 2/3% of the employee's final | 4 |
| rate of earnings for each of the
first 15 years of | 5 |
| creditable service and 2% for each year in excess | 6 |
| of 15
years , with any remaining fraction of a year
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| for annuitants with more
than 15 years by the | 8 |
| number of years plus fractional years, prorated on
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| the
a basis of months of creditable service and | 10 |
| multiply the product
thereof by the employee's | 11 |
| final rate of earnings .
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For creditable service by a member employed by | 13 |
| a participating employer that has filed with the | 14 |
| Board of the Fund a resolution or ordinance | 15 |
| expressly authorizing an augmented retirement | 16 |
| annuity that is earned on or after the filing of | 17 |
| the resolution or ordinance and creditable
service | 18 |
| earned before that date that has been augmented as | 19 |
| provided in Section
7-173.3, 2.25% of the | 20 |
| employee's final rate of earnings for each of the | 21 |
| first 15 years of
creditable service, and 2.5% for | 22 |
| each year in excess of 15 years with any remaining | 23 |
| fraction of a year prorated on the
basis of months.
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| (ii) For the sole purpose of computing the | 25 |
| formula (and not for the
purposes of the | 26 |
| limitations hereinafter stated) $125 shall be |
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LRB095 10697 AMC 30929 b |
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| considered
the final rate of earnings in all cases | 2 |
| where the final rate of earnings
is less than such | 3 |
| amount.
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| (iii) The monthly annuity computed in | 5 |
| accordance with this
subparagraph b , shall not | 6 |
| exceed an amount equal to 75% of the final
rate of | 7 |
| earnings.
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| (iv) For employees who have less than 35 | 9 |
| years of service, the
annuity computed in | 10 |
| accordance with this subparagraph b (as reduced by
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| application of subparagraph (iii)
above) shall be | 12 |
| reduced by 0.25% thereof (0.5% if service was | 13 |
| terminated
before January 1, 1988) for each month | 14 |
| or fraction thereof (1) that the
employee's age is | 15 |
| less than 60 years, or (2) if the employee has at | 16 |
| least
30 years of service credit, that the | 17 |
| employee's service credit is less than
35 years, | 18 |
| whichever is less, on the date the annuity begins.
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| 2. The annuity which can be provided from the total | 20 |
| accumulated
additional credits as of the attained age of | 21 |
| the employee on the date
the annuity begins.
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| (b) If payment of an annuity begins prior to the earliest | 23 |
| age at
which the employee will become eligible for an old age | 24 |
| insurance benefit
under the Federal Social Security Act, he may | 25 |
| elect that the annuity
payments from this fund shall exceed | 26 |
| those payable after his attaining
such age by an amount, |
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| computed as determined by rules of the Board, but
not in excess | 2 |
| of his estimated Social Security Benefit, determined as
of the | 3 |
| effective date of the annuity, provided that in no case shall | 4 |
| the
total annuity payments made by this fund exceed in | 5 |
| actuarial value the
annuity which would have been payable had | 6 |
| no such election been made.
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| (c) The retirement annuity shall be increased each year by | 8 |
| 2%, not
compounded, of the monthly amount of annuity, taking | 9 |
| into consideration
any adjustment under paragraph (b) of this | 10 |
| Section. This increase shall
be effective each January 1 and | 11 |
| computed from the effective date of the
retirement annuity, the | 12 |
| first increase being .167% of the monthly amount
times the | 13 |
| number of months from the effective date to January 1. | 14 |
| Beginning
January 1, 1984 and thereafter, the retirement | 15 |
| annuity shall be increased
by 3% each year, not compounded. | 16 |
| This increase shall not be applicable to
annuitants who are not | 17 |
| in service on or after September 8, 1971.
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| (Source: P.A. 91-357, eff. 7-29-99.)
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| (40 ILCS 5/7-173) (from Ch. 108 1/2, par. 7-173)
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| Sec. 7-173. Contributions by employees.
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| (a) Each participating employee shall make contributions | 22 |
| to the fund as
follows:
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| 1. For retirement annuity purposes, for augmented | 24 |
| service, normal contributions of 3 3/4% of
earnings and, | 25 |
| for unaugmented service, 3 3/4% of earnings plus any amount |
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| the Board deems necessary to support the augmented service | 2 |
| authorized by this amendatory Act of the 95th General | 3 |
| Assembly .
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| 2. Additional contributions of such percentages of | 5 |
| each payment of
earnings, as shall be elected by the | 6 |
| employee for retirement annuity
purposes, but not in excess | 7 |
| of 10%. The selected rate shall be
applicable to all | 8 |
| earnings beginning on the first day of the second
month | 9 |
| following receipt by the Board of written notice of | 10 |
| election to
make such contributions. Additional | 11 |
| contributions at the selected rate
shall be made | 12 |
| concurrently with normal contributions.
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| 3. Survivor contributions, by each participating | 14 |
| employee, of 3/4%
of each payment of earnings.
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| (b) Each employee shall make contributions to the fund for | 16 |
| federal
Social Security taxes, for periods during which he is a | 17 |
| covered
employee, as required by the Social Security Enabling | 18 |
| Act. For
participating employees, such contributions shall be | 19 |
| in addition to
those required under paragraph (a) of this | 20 |
| Section.
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| (c) Contributions shall be deducted from each | 22 |
| corresponding payment
of earnings paid to each employee and | 23 |
| shall be remitted to the board by
the participating | 24 |
| municipality or participating instrumentality making
such | 25 |
| payment. The remittance, together with a report of the earnings
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| and contributions shall be made as directed by the board. For |
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| township
treasurers and employees of township treasurers | 2 |
| qualifying as employees
hereunder, the contributions herein | 3 |
| required as deductions from salary
shall be withheld by the | 4 |
| school township trustees from funds available
for the payment | 5 |
| of the compensation of such treasurers and employees as
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| provided in the School Code and remitted to the board.
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| (d) An employee who has made additional contributions under
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| paragraph (a)2 of this Section may upon retirement or at any | 9 |
| time prior
thereto, elect to withdraw the total of such | 10 |
| additional contributions
including interest credited thereon | 11 |
| to the end of the preceding calendar
year.
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| (e) Failure to make the deductions for employee | 13 |
| contributions
provided in paragraph (c) of this Section shall | 14 |
| not relieve the employee
from liability for such contributions. | 15 |
| The amount of such liability may
be deducted, with interest | 16 |
| charged under Section 7-209, from any
annuities or benefits | 17 |
| payable hereunder to the employee or any other
person receiving | 18 |
| an annuity or benefit by reason of such employee's
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| participation.
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| (f) A participating employee who has at least 40 years of | 21 |
| creditable
service in the Fund may elect to cease making the | 22 |
| contributions required
under this Section. The status of the | 23 |
| employee under this Article shall be
unaffected by this | 24 |
| election, except that the employee shall not receive any
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| additional creditable service for the periods of employment | 26 |
| following the
election. An election under this subsection |
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LRB095 10697 AMC 30929 b |
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| relieves the employer from
making additional employer | 2 |
| contributions in relation to that employee.
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| (Source: P.A. 87-1265.)
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| (40 ILCS 5/7-173.3 new)
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| Sec. 7-173.3. Optional contribution for augmented | 6 |
| retirement formula.
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| (a) A member of the Fund may qualify for the augmented rate | 8 |
| under
subdivision (a)1.b.(i) of Section 7-142 for all years of | 9 |
| creditable service
earned before the filing of a resolution or | 10 |
| ordinance by his or her employer authorizing augmented service | 11 |
| by making the optional contribution specified in
subsection (b) | 12 |
| of this Section. A member may not elect to qualify for the
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| augmented rate for only a portion of his or her creditable | 14 |
| service earned
before the filing of the resolution or | 15 |
| ordinance.
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| (b) The contribution shall be an amount the Board deems | 17 |
| necessary to support the augmented service authorized by this | 18 |
| amendatory Act of the 95th General Assembly, expressed in a | 19 |
| percentage of the member's
salary rate during the 12 | 20 |
| consecutive months immediately prior to but not
including the | 21 |
| year in which the application occurs, multiplied by the number
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| of years of creditable service earned by the member before the | 23 |
| filing of the resolution or ordinance.
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| The contribution required by this subsection shall be paid | 25 |
| in one of the
following ways or in a combination of the |
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| following ways that does not extend
over more than 5 years:
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| (i) in a lump sum on or before the date of retirement;
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| (ii) in substantially equal installments over a period | 4 |
| of time not to
exceed 5 years, as a deduction from salary;
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| (iii) in
substantially equal monthly installments over | 6 |
| a 24-month period, by reducing
the annuitant's monthly | 7 |
| benefit over a 24-month period by the amount of the
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| otherwise applicable contribution. For federal and | 9 |
| Illinois tax purposes,
the monthly amount by which the | 10 |
| annuitant's benefit is reduced shall not be
treated as a | 11 |
| contribution by the annuitant, but rather as a reduction of | 12 |
| the
annuitant's monthly benefit.
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| (c) If the member fails to make the full contribution under | 14 |
| this Section
in a timely fashion, the payments made under this | 15 |
| Section shall be refunded
to the member, without interest. If | 16 |
| the member dies before making the full
contribution, the | 17 |
| payments made under this Section, together with regular
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| interest thereon, shall be refunded to the member's designated | 19 |
| beneficiary.
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| (d) For purposes of this Section and the retirement formula | 21 |
| in Section
7-142, optional creditable service established by a | 22 |
| member shall be deemed to
have been earned at the time of the | 23 |
| employment or other qualifying event upon
which the service is | 24 |
| based, rather than at the time the credit was established
in | 25 |
| this Fund.
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| (e) The contributions required under this Section are the |
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LRB095 10697 AMC 30929 b |
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| responsibility
of the employee and not the employer. However, | 2 |
| an employer may specifically
agree, through collective | 3 |
| bargaining or otherwise, to make the contributions
required by | 4 |
| this Section on behalf of its employees.
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| Section 99. Effective date. This Act takes effect upon | 6 |
| becoming law. |
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