Full Text of SB1440 96th General Assembly
SB1440sam001 96TH GENERAL ASSEMBLY
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Sen. Kwame Raoul
Filed: 3/24/2009
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| AMENDMENT TO SENATE BILL 1440
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| AMENDMENT NO. ______. Amend Senate Bill 1440 by replacing | 3 |
| everything after the enacting clause with the following:
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| "Section 5. The Illinois Pension Code is amended by | 5 |
| changing Sections 1-106 and 15-136.4 as follows:
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| (40 ILCS 5/1-106) (from Ch. 108 1/2, par. 1-106)
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| Sec. 1-106. Payment of distribution other than direct.
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| (a) The board of trustees of any retirement fund or system | 9 |
| operating
under this Code may, at the written direction and | 10 |
| request of any annuitant,
solely as an accommodation to the | 11 |
| annuitant, pay the annuity
due the annuitant to a bank, savings | 12 |
| and loan association,
or any other financial institution | 13 |
| insured by an agency of the federal
government, for deposit to | 14 |
| the account of the annuitant, or to a bank,
savings and loan | 15 |
| association, or trust company for deposit in a trust
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| established by the annuitant for his or her benefit with that |
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| bank, savings and
loan association, or trust company. The | 2 |
| annuitant may withdraw the direction
at any time.
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| (b) Beginning January 1, 1993, each pension fund or | 4 |
| retirement system
operating under this Code may, and to the | 5 |
| extent required by federal law
shall, at the request of any | 6 |
| person entitled to receive a refund, lump-sum
benefit, or other | 7 |
| nonperiodic distribution from the pension fund or retirement
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| system, pay the taxable portion of that distribution directly | 9 |
| to any entity
that (1) is designated in writing by the person, | 10 |
| (2) is qualified under federal
law to accept an eligible | 11 |
| rollover distribution from a qualified plan, and (3)
has agreed | 12 |
| to accept the distribution.
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| (Source: P.A. 87-1265.)
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| (40 ILCS 5/15-136.4)
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| Sec. 15-136.4. Retirement and Survivor Benefits Under | 16 |
| Portable
Benefit Package. | 17 |
| (a) This Section 15-136.4 describes the form of annuity and | 18 |
| survivor
benefits available to a participant who has elected | 19 |
| the portable benefit
package and has completed the one-year | 20 |
| waiting period required under subsection
(e) of Section | 21 |
| 15-134.5. For purposes of this Section, the term
"eligible | 22 |
| spouse" means the husband or wife of a participant to whom the
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| participant is married on the date the participant's retirement | 24 |
| annuity
payment period begins, provided however, that if the | 25 |
| participant should die prior
to the commencement of retirement |
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| annuity benefits, then "eligible spouse"
means the husband or | 2 |
| wife, if any, to whom
the participant was married throughout | 3 |
| the one-year period preceding the date
of his or her death.
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| (b) This subsection (b) describes the normal form of | 5 |
| annuity payable
to a participant subject to this Section | 6 |
| 15-136.4. If the participant is
unmarried on the date his or | 7 |
| her annuity payment period begins payments commence , then the | 8 |
| annuity
payments shall be made in the form of a single-life | 9 |
| annuity as described in
Section 15-118. If the participant is | 10 |
| married on the date his or her annuity
payments commence, then | 11 |
| the annuity payments shall be paid in the form of a
qualified | 12 |
| joint and survivor annuity that is the actuarial equivalent of | 13 |
| the
single-life annuity. Under the "qualified joint and | 14 |
| survivor annuity", a
reduced amount shall be paid to the | 15 |
| participant for his or her lifetime and his
or her eligible | 16 |
| spouse, if surviving at the participant's death, shall be
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| entitled to receive thereafter a lifetime survivorship annuity | 18 |
| in a monthly
amount equal to 50% of the reduced monthly amount | 19 |
| that was payable to the
participant. The last payment of a | 20 |
| qualified joint and survivor annuity shall
be made as of the | 21 |
| first day of the month in which the death of the survivor
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| occurs.
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| (c) Instead of the normal form of annuity that would be | 24 |
| paid under
subsection (b), a participant may elect in writing | 25 |
| within the 90-day period
prior to the date his or her annuity | 26 |
| payments commence to waive the normal form
of annuity payment |
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| and receive an optional form of payment annuity as described in
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| subsection (h). If the participant is married and elects an | 3 |
| optional form of
payment annuity under subsection (h) other | 4 |
| than a joint and survivor annuity with the
eligible spouse | 5 |
| designated as the contingent annuitant, then such election
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| shall require the consent of his or her eligible spouse in the | 7 |
| manner described
in subsection (d). At any time during the | 8 |
| 90-day period preceding the date the
participant's payment | 9 |
| period begins annuity commences , the participant may revoke the | 10 |
| optional form
of payment elected under this subsection (c) and | 11 |
| reinstate coverage under the qualified
joint and survivor | 12 |
| annuity without the spouse's consent, but an election to
revoke | 13 |
| the optional form elected and elect a new optional form of | 14 |
| payment or designate a
different contingent annuitant shall not | 15 |
| be effective without the eligible
spouse's consent.
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| (d) The eligible spouse's consent to any election made
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| pursuant to this Section that requires the eligible spouse's | 18 |
| consent shall be
in writing and shall acknowledge the effect of | 19 |
| the consent. In addition, the
eligible spouse's signature on | 20 |
| the written consent must be witnessed by a
notary public. The | 21 |
| eligible spouse's consent need not be obtained if the
system is | 22 |
| satisfied that there is no eligible spouse, that the eligible | 23 |
| spouse
cannot be located, or because of any other relevant | 24 |
| circumstances. An eligible
spouse's consent under this Section | 25 |
| is valid only with respect to the specified
optional form of | 26 |
| payment and, if applicable, contingent
annuitant designated by |
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| the participant. If the optional form of payment or
the | 2 |
| contingent annuitant is subsequently changed (other than
by a | 3 |
| revocation of the optional form of payment and reinstatement of | 4 |
| the qualified joint
and survivor annuity), a new consent by the | 5 |
| eligible spouse is required. The
eligible spouse's consent to | 6 |
| an election made by a participant pursuant to this
Section, | 7 |
| once made, may not be revoked by the eligible spouse.
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| (e) Within a reasonable period of time preceding the date a
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| participant's annuity commences, a participant shall be | 10 |
| supplied with a written
explanation of (1) the terms and | 11 |
| conditions of the normal form single-life
annuity and qualified | 12 |
| joint and survivor annuity, (2) the
participant's right to | 13 |
| elect a single-life annuity or an optional
form of payment | 14 |
| under subsection (h) subject to his or her eligible
spouse's | 15 |
| consent, if applicable, and (3) the participant's right to
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| reinstate coverage under the qualified joint and survivor | 17 |
| annuity
prior to his or her annuity commencement date by | 18 |
| revoking an election of an
optional form of payment benefit | 19 |
| under subsection (h).
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| (f) If a married participant with at least 1.5 years of
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| service dies prior to commencing retirement annuity payments | 22 |
| and prior to
taking a refund under Section 15-154, his or her | 23 |
| eligible spouse is entitled
to receive a pre-retirement | 24 |
| survivor annuity, if there is not then in effect
a waiver of | 25 |
| the pre-retirement survivor annuity. The pre-retirement | 26 |
| survivor
annuity payable under this subsection shall be a |
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| monthly annuity payable for
the eligible spouse's life, | 2 |
| commencing as of the beginning of the month next
following the | 3 |
| later of the date of the participant's death or the date the
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| participant would have first met the eligibility requirements | 5 |
| for retirement,
and continuing through the beginning of the | 6 |
| month in which the death of the
eligible spouse occurs. The | 7 |
| monthly amount payable to the spouse under the
pre-retirement | 8 |
| survivor annuity shall be equal to the monthly
amount that | 9 |
| would be payable as a survivor annuity under the qualified | 10 |
| joint
and survivor annuity described in subsection (b) if: (1) | 11 |
| in the case of a
participant who dies on or after the date on | 12 |
| which the participant has
met the eligibility requirements for | 13 |
| retirement, the participant had retired
with an immediate | 14 |
| qualified joint and
survivor annuity on the day before the | 15 |
| participant's date of death; or (2) in
the case of a | 16 |
| participant who dies before the earliest date on
which the | 17 |
| participant would have met the eligibility requirements for | 18 |
| retirement age, the participant had separated from
service on | 19 |
| the date of death, survived to the earliest retirement age | 20 |
| based
on service prior to his or her death, retired with an | 21 |
| immediate qualified
joint and survivor annuity at the earliest | 22 |
| retirement age, and died on the day
after the day on which the | 23 |
| participant would have attained the earliest
retirement age.
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| (g) A married participant who has not retired may elect at | 25 |
| any time to
waive the pre-retirement survivor annuity described | 26 |
| in subsection (f). Any
such election shall require the consent |
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| of the participant's eligible spouse
in the manner described in | 2 |
| subsection (d) (e) . A waiver of the pre-retirement
survivor | 3 |
| annuity shall increase the lump sum death benefit payable under
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| subsection (b) of Section 15-141. Prior to electing any waiver | 5 |
| of the
pre-retirement survivor annuity, the participant shall | 6 |
| be provided with a
written explanation of (1) the terms and | 7 |
| conditions of the pre-retirement
survivor annuity and the death | 8 |
| benefits payable from the system both with and
without the | 9 |
| pre-retirement survivor annuity, (2) the participant's right | 10 |
| to
elect a waiver of the pre-retirement survivor annuity | 11 |
| coverage subject to his
or her spouse's consent, and (3) the | 12 |
| participant's right to reinstate
pre-retirement survivor | 13 |
| annuity coverage at any time by revoking a prior waiver
of such | 14 |
| coverage.
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| (h) By filing a timely election with the system, a | 16 |
| participant who will
be eligible to receive a retirement | 17 |
| annuity under this Section may waive the
normal form of annuity | 18 |
| payment described in subsection (b), subject to
obtaining the | 19 |
| consent of his or her eligible spouse, if applicable, and elect
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| to receive any one of the following optional forms of payment :
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| (1) Joint and Survivor Annuity Options: The | 22 |
| participant may elect to
receive a reduced annuity payable | 23 |
| for his or her life and to have a lifetime
survivorship | 24 |
| annuity in a monthly amount equal to 50%, 75%, or 100% (as | 25 |
| elected
by the participant) of that reduced monthly amount, | 26 |
| to be paid after the
participant's death to his or her |
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| contingent annuitant, if the contingent
annuitant is alive | 2 |
| at the time of the participant's death.
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| (2) Single-Life Annuity Option (optional for married | 4 |
| participants). The
participant may elect to receive a | 5 |
| single-life annuity payable for his or her
life only.
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| (3) Lump sum retirement benefit. The participant may | 7 |
| elect to receive a
lump sum retirement benefit that is | 8 |
| equal to the amount of a refund payable
under Section | 9 |
| 15-154(a-2).
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| All joint and survivor optional annuity forms shall be in an | 11 |
| amount that is the actuarial
equivalent of the single-life | 12 |
| annuity.
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| For the purposes of this Section, the term "contingent | 14 |
| annuitant" means the
beneficiary who is designated by a | 15 |
| participant at the time the participant
elects a joint and | 16 |
| survivor annuity to receive the lifetime survivorship
annuity | 17 |
| in the event the beneficiary survives the participant at the
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| participant's death.
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| (i) Under no circumstances may an option be elected, | 20 |
| changed, or revoked
after the date the participant's retirement | 21 |
| annuity commences.
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| (j) An election made pursuant to subsection (h)
shall | 23 |
| become inoperative if the participant or the
contingent | 24 |
| annuitant dies before the date the participant's annuity | 25 |
| payments
commence, or if the eligible spouse's consent is | 26 |
| required and not given.
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| (k) (Blank).
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| (l) The automatic annual increases described in subsection | 3 |
| (d) of Section
15-136 shall apply to retirement benefits under | 4 |
| the portable benefit package
and the automatic annual increases | 5 |
| described in subsection (j) of Section
15-145 shall apply to | 6 |
| survivor benefits under the portable benefit package.
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| (Source: P.A. 90-448, eff. 8-16-97; 90-766, eff. 8-14-98; | 8 |
| 91-887, eff.
7-6-00 .)
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| Section 99. Effective date. This Act takes effect upon | 10 |
| becoming law.".
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