Illinois General Assembly - Full Text of HB0306
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Full Text of HB0306  96th General Assembly

HB0306sam002 96TH GENERAL ASSEMBLY

Sen. Mike Jacobs

Filed: 11/18/2010

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 306

2    AMENDMENT NO. ______. Amend House Bill 306 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Pension Code is amended by
5changing Section 3-110 as follows:
 
6    (40 ILCS 5/3-110)  (from Ch. 108 1/2, par. 3-110)
7    Sec. 3-110. Creditable service.
8    (a) "Creditable service" is the time served by a police
9officer as a member of a regularly constituted police force of
10a municipality. In computing creditable service furloughs
11without pay exceeding 30 days shall not be counted, but all
12leaves of absence for illness or accident, regardless of
13length, and all periods of disability retirement for which a
14police officer has received no disability pension payments
15under this Article shall be counted.
16    (a-5) Up to 3 years of time during which the police officer

 

 

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1receives a disability pension under Section 3-114.1, 3-114.2,
23-114.3, or 3-114.6 shall be counted as creditable service,
3provided that (i) the police officer returns to active service
4after the disability for a period at least equal to the period
5for which credit is to be established and (ii) the police
6officer makes contributions to the fund based on the rates
7specified in Section 3-125.1 and the salary upon which the
8disability pension is based. These contributions may be paid at
9any time prior to the commencement of a retirement pension. The
10police officer may, but need not, elect to have the
11contributions deducted from the disability pension or to pay
12them in installments on a schedule approved by the board. If
13not deducted from the disability pension, the contributions
14shall include interest at the rate of 6% per year, compounded
15annually, from the date for which service credit is being
16established to the date of payment. If contributions are paid
17under this subsection (a-5) in excess of those needed to
18establish the credit, the excess shall be refunded. This
19subsection (a-5) applies to persons receiving a disability
20pension under Section 3-114.1, 3-114.2, 3-114.3, or 3-114.6 on
21the effective date of this amendatory Act of the 91st General
22Assembly, as well as persons who begin to receive such a
23disability pension after that date.
24    (b) Creditable service includes all periods of service in
25the military, naval or air forces of the United States entered
26upon while an active police officer of a municipality, provided

 

 

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1that upon applying for a permanent pension, and in accordance
2with the rules of the board, the police officer pays into the
3fund the amount the officer would have contributed if he or she
4had been a regular contributor during such period, to the
5extent that the municipality which the police officer served
6has not made such contributions in the officer's behalf. The
7total amount of such creditable service shall not exceed 5
8years, except that any police officer who on July 1, 1973 had
9more than 5 years of such creditable service shall receive the
10total amount thereof.
11    (b-5) Creditable service includes up to 24 months all
12periods of service in the military, naval, or air forces of the
13United States entered upon before beginning service as an
14active police officer of a municipality, provided that, in
15accordance with the rules of the board, the police officer
16applies to the pension fund in writing and pays into the fund
17the employee contributions that would have been required had
18the service been rendered as a member of the fund on the date
19of membership in the fund amount the police officer would have
20contributed if he or she had been a regular contributor during
21such period, plus an amount determined by the Board to be equal
22to the municipality's normal cost of the benefit, plus interest
23on those amounts at the actuarially assumed rate, compounded
24annually, calculated from the date of membership in the fund to
25the date of payment the employee last became a police officer
26under this Article. The total amount of such creditable service

 

 

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1shall not exceed 2 years. The changes made to this subsection
2(b-5) by this amendatory Act of the 96th General Assembly apply
3only to participating employees while in service on or after
4July 23, 2010.
5    (c) Creditable service also includes service rendered by a
6police officer while on leave of absence from a police
7department to serve as an executive of an organization whose
8membership consists of members of a police department, subject
9to the following conditions: (i) the police officer is a
10participant of a fund established under this Article with at
11least 10 years of service as a police officer; (ii) the police
12officer received no credit for such service under any other
13retirement system, pension fund, or annuity and benefit fund
14included in this Code; (iii) pursuant to the rules of the board
15the police officer pays to the fund the amount he or she would
16have contributed had the officer been an active member of the
17police department; and (iv) the organization pays a
18contribution equal to the municipality's normal cost for that
19period of service.
20        (d)(1) Creditable service also includes periods of
21    service originally established in another police pension
22    fund under this Article or in the Fund established under
23    Article 7 of this Code for which (i) the contributions have
24    been transferred under Section 3-110.7 or Section 7-139.9
25    and (ii) any additional contribution required under
26    paragraph (2) of this subsection has been paid in full in

 

 

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1    accordance with the requirements of this subsection (d).
2        (2) If the board of the pension fund to which
3    creditable service and related contributions are
4    transferred under Section 7-139.9 determines that the
5    amount transferred is less than the true cost to the
6    pension fund of allowing that creditable service to be
7    established, then in order to establish that creditable
8    service the police officer must pay to the pension fund,
9    within the payment period specified in paragraph (3) of
10    this subsection, an additional contribution equal to the
11    difference, as determined by the board in accordance with
12    the rules and procedures adopted under paragraph (6) of
13    this subsection. If the board of the pension fund to which
14    creditable service and related contributions are
15    transferred under Section 3-110.7 determines that the
16    amount transferred is less than the true cost to the
17    pension fund of allowing that creditable service to be
18    established, then the police officer may elect (A) to
19    establish that creditable service by paying to the pension
20    fund, within the payment period specified in paragraph (3)
21    of this subsection (d), an additional contribution equal to
22    the difference, as determined by the board in accordance
23    with the rules and procedures adopted under paragraph (6)
24    of this subsection (d) or (B) to have his or her creditable
25    service reduced by an amount equal to the difference
26    between the amount transferred under Section 3-110.7 and

 

 

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1    the true cost to the pension fund of allowing that
2    creditable service to be established, as determined by the
3    board in accordance with the rules and procedures adopted
4    under paragraph (6) of this subsection (d).
5        (3) Except as provided in paragraph (4), the additional
6    contribution that is required or elected under paragraph
7    (2) of this subsection (d) must be paid to the board (i)
8    within 5 years from the date of the transfer of
9    contributions under Section 3-110.7 or 7-139.9 and (ii)
10    before the police officer terminates service with the fund.
11    The additional contribution may be paid in a lump sum or in
12    accordance with a schedule of installment payments
13    authorized by the board.
14        (4) If the police officer dies in service before
15    payment in full has been made and before the expiration of
16    the 5-year payment period, the surviving spouse of the
17    officer may elect to pay the unpaid amount on the officer's
18    behalf within 6 months after the date of death, in which
19    case the creditable service shall be granted as though the
20    deceased police officer had paid the remaining balance on
21    the day before the date of death.
22        (5) If the additional contribution that is required or
23    elected under paragraph (2) of this subsection (d) is not
24    paid in full within the required time, the creditable
25    service shall not be granted and the police officer (or the
26    officer's surviving spouse or estate) shall be entitled to

 

 

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1    receive a refund of (i) any partial payment of the
2    additional contribution that has been made by the police
3    officer and (ii) those portions of the amounts transferred
4    under subdivision (a)(1) of Section 3-110.7 or
5    subdivisions (a)(1) and (a)(3) of Section 7-139.9 that
6    represent employee contributions paid by the police
7    officer (but not the accumulated interest on those
8    contributions) and interest paid by the police officer to
9    the prior pension fund in order to reinstate service
10    terminated by acceptance of a refund.
11        At the time of paying a refund under this item (5), the
12    pension fund shall also repay to the pension fund from
13    which the contributions were transferred under Section
14    3-110.7 or 7-139.9 the amount originally transferred under
15    subdivision (a)(2) of that Section, plus interest at the
16    rate of 6% per year, compounded annually, from the date of
17    the original transfer to the date of repayment. Amounts
18    repaid to the Article 7 fund under this provision shall be
19    credited to the appropriate municipality.
20        Transferred credit that is not granted due to failure
21    to pay the additional contribution within the required time
22    is lost; it may not be transferred to another pension fund
23    and may not be reinstated in the pension fund from which it
24    was transferred.
25        (6) The Public Employee Pension Fund Division of the
26    Department of Insurance shall establish by rule the manner

 

 

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1    of making the calculation required under paragraph (2) of
2    this subsection, taking into account the appropriate
3    actuarial assumptions; the police officer's service, age,
4    and salary history; the level of funding of the pension
5    fund to which the credits are being transferred; and any
6    other factors that the Division determines to be relevant.
7    The rules may require that all calculations made under
8    paragraph (2) be reported to the Division by the board
9    performing the calculation, together with documentation of
10    the creditable service to be transferred, the amounts of
11    contributions and interest to be transferred, the manner in
12    which the calculation was performed, the numbers relied
13    upon in making the calculation, the results of the
14    calculation, and any other information the Division may
15    deem useful.
16        (e)(1) Creditable service also includes periods of
17    service originally established in the Fund established
18    under Article 7 of this Code for which the contributions
19    have been transferred under Section 7-139.11.
20        (2) If the board of the pension fund to which
21    creditable service and related contributions are
22    transferred under Section 7-139.11 determines that the
23    amount transferred is less than the true cost to the
24    pension fund of allowing that creditable service to be
25    established, then the amount of creditable service the
26    police officer may establish under this subsection (e)

 

 

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1    shall be reduced by an amount equal to the difference, as
2    determined by the board in accordance with the rules and
3    procedures adopted under paragraph (3) of this subsection.
4        (3) The Public Pension Division of the Department of
5    Financial and Professional Regulation shall establish by
6    rule the manner of making the calculation required under
7    paragraph (2) of this subsection, taking into account the
8    appropriate actuarial assumptions; the police officer's
9    service, age, and salary history; the level of funding of
10    the pension fund to which the credits are being
11    transferred; and any other factors that the Division
12    determines to be relevant. The rules may require that all
13    calculations made under paragraph (2) be reported to the
14    Division by the board performing the calculation, together
15    with documentation of the creditable service to be
16    transferred, the amounts of contributions and interest to
17    be transferred, the manner in which the calculation was
18    performed, the numbers relied upon in making the
19    calculation, the results of the calculation, and any other
20    information the Division may deem useful.
21        (4) Until January 1, 2010, a police officer who
22    transferred service from the Fund established under
23    Article 7 of this Code under the provisions of Public Act
24    94-356 may establish additional credit, but only for the
25    amount of the service credit reduction in that transfer, as
26    calculated under paragraph (3) of this subsection (e). This

 

 

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1    credit may be established upon payment by the police
2    officer of an amount to be determined by the board, equal
3    to (1) the amount that would have been contributed as
4    employee and employer contributions had all of the service
5    been as an employee under this Article, plus interest
6    thereon at the rate of 6% per year, compounded annually
7    from the date of service to the date of transfer, less (2)
8    the total amount transferred from the Article 7 Fund, plus
9    (3) interest on the difference at the rate of 6% per year,
10    compounded annually, from the date of the transfer to the
11    date of payment. The additional service credit is allowed
12    under this amendatory Act of the 95th General Assembly
13    notwithstanding the provisions of Article 7 terminating
14    all transferred credits on the date of transfer.
15(Source: P.A. 95-812, eff. 8-13-08; 96-297, eff. 8-11-09;
1696-1260, eff. 7-23-10.)
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.".