Sen. Michael Noland

Filed: 3/3/2010





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2     AMENDMENT NO. ______. Amend Senate Bill 3663 by replacing
3 everything after the enacting clause with the following:
4     "Section 5. The Illinois Pension Code is amended by
5 changing Section 7-139 as follows:
6     (40 ILCS 5/7-139)  (from Ch. 108 1/2, par. 7-139)
7     Sec. 7-139. Credits and creditable service to employees.
8     (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:
12         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
16     paragraph 2 of this subsection (a), for periods of prior



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1     service for which credit has not been received under any
2     other pension fund or retirement system established under
3     this Code, as follows:
4         If the effective date of participation for the
5     participating municipality or participating
6     instrumentality is on or before January 1, 1998, creditable
7     service shall be granted for the entire period of prior
8     service with that employer without any employee
9     contribution.
10         If the effective date of participation for the
11     participating municipality or participating
12     instrumentality is after January 1, 1998, creditable
13     service shall be granted for the last 20% of the period of
14     prior service with that employer, but no more than 5 years,
15     without any employee contribution. A participating
16     employee may establish creditable service for the
17     remainder of the period of prior service with that employer
18     by making an application in writing, accompanied by payment
19     of an employee contribution in an amount determined by the
20     Fund, based on the employee contribution rates in effect at
21     the time of application for the creditable service and the
22     employee's salary rate on the effective date of
23     participation for that employer, plus interest at the
24     effective rate from the date of the prior service to the
25     date of payment. Application for this creditable service
26     may be made at any time while the employee is still in



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1     service.
2         A municipality that (i) has at least 35 employees; (ii)
3     is located in a county with at least 2,000,000 inhabitants;
4     and (iii) maintains an independent defined benefit pension
5     plan for the benefit of its eligible employees may restrict
6     creditable service in whole or in part for periods of prior
7     service with the employer if the governing body of the
8     municipality adopts an irrevocable resolution to restrict
9     that creditable service and files the resolution with the
10     board before the municipality's effective date of
11     participation.
12         Any person who has withdrawn from the service of a
13     participating municipality or participating
14     instrumentality prior to the effective date, who reenters
15     the service of the same municipality or participating
16     instrumentality after the effective date and becomes a
17     participating employee is entitled to creditable service
18     for prior service as otherwise provided in this subdivision
19     (a)(1) only if he or she renders 2 years of service as a
20     participating employee after the effective date.
21     Application for such service must be made while in a
22     participating status. The salary rate to be used in the
23     calculation of the required employee contribution, if any,
24     shall be the employee's salary rate at the time of first
25     reentering service with the employer after the employer's
26     effective date of participation.



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1         2. For current service, each participating employee
2     shall be credited with:
3             a. Additional credits of amounts equal to each
4         payment of additional contributions received from him
5         under Section 7-173, as of the date the corresponding
6         payment of earnings is payable to him.
7             b. Normal credits of amounts equal to each payment
8         of normal contributions received from him, as of the
9         date the corresponding payment of earnings is payable
10         to him, and normal contributions made for the purpose
11         of establishing out-of-state service credits as
12         permitted under the conditions set forth in paragraph 6
13         of this subsection (a).
14             c. Municipality credits in an amount equal to 1.4
15         times the normal credits, except those established by
16         out-of-state service credits, as of the date of
17         computation of any benefit if these credits would
18         increase the benefit.
19             d. Survivor credits equal to each payment of
20         survivor contributions received from the participating
21         employee as of the date the corresponding payment of
22         earnings is payable, and survivor contributions made
23         for the purpose of establishing out-of-state service
24         credits.
25         3. For periods of temporary and total and permanent
26     disability benefits, each employee receiving disability



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1     benefits shall be granted creditable service for the period
2     during which disability benefits are payable. Normal and
3     survivor credits, based upon the rate of earnings applied
4     for disability benefits, shall also be granted if such
5     credits would result in a higher benefit to any such
6     employee or his beneficiary.
7         4. For authorized leave of absence without pay: A
8     participating employee shall be granted credits and
9     creditable service for periods of authorized leave of
10     absence without pay under the following conditions:
11             a. An application for credits and creditable
12         service is submitted to the board while the employee is
13         in a status of active employment, and within 2 years
14         after termination of the leave of absence period for
15         which credits and creditable service are sought.
16             b. Not more than 12 complete months of creditable
17         service for authorized leave of absence without pay
18         shall be counted for purposes of determining any
19         benefits payable under this Article.
20             c. Credits and creditable service shall be granted
21         for leave of absence only if such leave is approved by
22         the governing body of the municipality, including
23         approval of the estimated cost thereof to the
24         municipality as determined by the fund, and employee
25         contributions, plus interest at the effective rate
26         applicable for each year from the end of the period of



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1         leave to date of payment, have been paid to the fund in
2         accordance with Section 7-173. The contributions shall
3         be computed upon the assumption earnings continued
4         during the period of leave at the rate in effect when
5         the leave began.
6             d. Benefits under the provisions of Sections
7         7-141, 7-146, 7-150 and 7-163 shall become payable to
8         employees on authorized leave of absence, or their
9         designated beneficiary, only if such leave of absence
10         is creditable hereunder, and if the employee has at
11         least one year of creditable service other than the
12         service granted for leave of absence. Any employee
13         contributions due may be deducted from any benefits
14         payable.
15             e. No credits or creditable service shall be
16         allowed for leave of absence without pay during any
17         period of prior service.
18         5. For military service: The governing body of a
19     municipality or participating instrumentality may elect to
20     allow creditable service to participating employees who
21     leave their employment to serve in the armed forces of the
22     United States for all periods of such service, provided
23     that the person returns to active employment within 90 days
24     after completion of full time active duty, but no
25     creditable service shall be allowed such person for any
26     period that can be used in the computation of a pension or



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1     any other pay or benefit, other than pay for active duty,
2     for service in any branch of the armed forces of the United
3     States. If necessary to the computation of any benefit, the
4     board shall establish municipality credits for
5     participating employees under this paragraph on the
6     assumption that the employee received earnings at the rate
7     received at the time he left the employment to enter the
8     armed forces. A participating employee in the armed forces
9     shall not be considered an employee during such period of
10     service and no additional death and no disability benefits
11     are payable for death or disability during such period.
12         Any participating employee who left his employment
13     with a municipality or participating instrumentality to
14     serve in the armed forces of the United States and who
15     again became a participating employee within 90 days after
16     completion of full time active duty by entering the service
17     of a different municipality or participating
18     instrumentality, which has elected to allow creditable
19     service for periods of military service under the preceding
20     paragraph, shall also be allowed creditable service for his
21     period of military service on the same terms that would
22     apply if he had been employed, before entering military
23     service, by the municipality or instrumentality which
24     employed him after he left the military service and the
25     employer costs arising in relation to such grant of
26     creditable service shall be charged to and paid by that



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1     municipality or instrumentality.
2         Notwithstanding the foregoing, any participating
3     employee shall be entitled to creditable service as
4     required by any federal law relating to re-employment
5     rights of persons who served in the United States Armed
6     Services. Such creditable service shall be granted upon
7     payment by the member of an amount equal to the employee
8     contributions which would have been required had the
9     employee continued in service at the same rate of earnings
10     during the military leave period, plus interest at the
11     effective rate.
12         5.1. In addition to any creditable service established
13     under paragraph 5 of this subsection (a), creditable
14     service may be granted for up to 48 months of service in
15     the armed forces of the United States.
16         In order to receive creditable service for military
17     service under this paragraph 5.1, a participating employee
18     must (1) apply to the Fund in writing and provide evidence
19     of the military service that is satisfactory to the Board;
20     (2) obtain the written approval of the current employer;
21     and (3) make contributions to the Fund equal to (i) the
22     employee contributions that would have been required had
23     the service been rendered as a member, plus (ii) an amount
24     determined by the board to be equal to the employer's
25     normal cost of the benefits accrued for that military
26     service, plus (iii) interest on items (i) and (ii) from the



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1     date of first membership in the Fund to the date of
2     payment. The required interest shall be calculated at the
3     regular interest rate.
4         The changes made to this paragraph 5.1 by Public Acts
5     95-483 and 95-486 apply only to participating employees in
6     service on or after August 28, 2007 (the effective date of
7     those Public Acts).
8         6. For out-of-state service: Creditable service shall
9     be granted for service rendered to an out-of-state local
10     governmental body under the following conditions: The
11     employee had participated and has irrevocably forfeited
12     all rights to benefits in the out-of-state public employees
13     pension system; the governing body of his participating
14     municipality or instrumentality authorizes the employee to
15     establish such service; the employee has 2 years current
16     service with this municipality or participating
17     instrumentality; the employee makes a payment of
18     contributions, which shall be computed at 8% (normal) plus
19     2% (survivor) times length of service purchased times the
20     average rate of earnings for the first 2 years of service
21     with the municipality or participating instrumentality
22     whose governing body authorizes the service established
23     plus interest at the effective rate on the date such
24     credits are established, payable from the date the employee
25     completes the required 2 years of current service to date
26     of payment. In no case shall more than 120 months of



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1     creditable service be granted under this provision.
2         7. For retroactive service: Any employee who could have
3     but did not elect to become a participating employee, or
4     who should have been a participant in the Municipal Public
5     Utilities Annuity and Benefit Fund before that fund was
6     superseded, may receive creditable service for the period
7     of service not to exceed 50 months; however, a current or
8     former elected or appointed official of a participating
9     municipality may establish credit under this paragraph 7
10     for more than 50 months of service as an official of that
11     municipality, if the excess over 50 months is approved by
12     resolution of the governing body of the affected
13     municipality filed with the Fund before January 1, 2002.
14         Any employee who is a participating employee on or
15     after September 24, 1981 and who was excluded from
16     participation by the age restrictions removed by Public Act
17     82-596 may receive creditable service for the period, on or
18     after January 1, 1979, excluded by the age restriction and,
19     in addition, if the governing body of the participating
20     municipality or participating instrumentality elects to
21     allow creditable service for all employees excluded by the
22     age restriction prior to January 1, 1979, for service
23     during the period prior to that date excluded by the age
24     restriction. Any employee who was excluded from
25     participation by the age restriction removed by Public Act
26     82-596 and who is not a participating employee on or after



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1     September 24, 1981 may receive creditable service for
2     service after January 1, 1979. Creditable service under
3     this paragraph shall be granted upon payment of the
4     employee contributions which would have been required had
5     he participated, with interest at the effective rate for
6     each year from the end of the period of service established
7     to date of payment.
8         8. For accumulated unused sick leave: A participating
9     employee who is applying for a retirement annuity shall be
10     entitled to creditable service for that portion of the
11     employee's accumulated unused sick leave for which payment
12     is not received, as follows:
13             a. Sick leave days shall be limited to those
14         accumulated under a sick leave plan established by a
15         participating municipality or participating
16         instrumentality which is available to all employees or
17         a class of employees.
18             b. Except as provided in item b-1, only sick leave
19         days accumulated with a participating municipality or
20         participating instrumentality with which the employee
21         was in service within 60 days of the effective date of
22         his retirement annuity shall be credited; If the
23         employee was in service with more than one employer
24         during this period only the sick leave days with the
25         employer with which the employee has the greatest
26         number of unpaid sick leave days shall be considered.



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1             b-1. If the employee was in the service of more
2         than one or more employer as defined in item (2) of
3         paragraph (a) of subsection (A) or paragraph (c) of
4         subsection (B) of Section 7-132, then the sick leave
5         days from such employer or all such employers shall be
6         credited, as long as the creditable service attributed
7         to those sick leave days does not exceed the limitation
8         in item d f of this paragraph 8. In calculating the
9         creditable service under this item b-1, the sick leave
10         days from the last employer shall be considered first,
11         then the remaining sick leave days shall be considered
12         until there are no more days or the maximum creditable
13         sick leave threshold under item d f of this paragraph 8
14         has been reached.
15             c. The creditable service granted shall be
16         considered solely for the purpose of computing the
17         amount of the retirement annuity and shall not be used
18         to establish any minimum service period required by any
19         provision of the Illinois Pension Code, the effective
20         date of the retirement annuity, or the final rate of
21         earnings.
22             d. The creditable service shall be at the rate of
23         1/20 of a month for each full sick day, provided that
24         no more than 12 months may be credited under this
25         subdivision 8.
26             e. Employee contributions shall not be required



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1         for creditable service under this subdivision 8.
2             f. Each participating municipality and
3         participating instrumentality with which an employee
4         has service within 60 days of the effective date of his
5         retirement annuity and each employer referenced in
6         item b-1 of this paragraph 8 shall certify to the board
7         the number of accumulated unpaid sick leave days
8         credited to the employee at the time of termination of
9         service.
10         9. For service transferred from another system:
11     Credits and creditable service shall be granted for service
12     under Article 3, 4, 5, 8, 14, or 16 of this Act, to any
13     active member of this Fund, and to any inactive member who
14     has been a county sheriff, upon transfer of such credits
15     pursuant to Section 3-110.3, 4-108.3, 5-235, 8-226.7,
16     14-105.6, or 16-131.4, and payment by the member of the
17     amount by which (1) the employer and employee contributions
18     that would have been required if he had participated in
19     this Fund as a sheriff's law enforcement employee during
20     the period for which credit is being transferred, plus
21     interest thereon at the effective rate for each year,
22     compounded annually, from the date of termination of the
23     service for which credit is being transferred to the date
24     of payment, exceeds (2) the amount actually transferred to
25     the Fund. Such transferred service shall be deemed to be
26     service as a sheriff's law enforcement employee for the



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1     purposes of Section 7-142.1.
2         10. For service transferred from an Article 3 system
3     under Section 3-110.8: Credits and creditable service
4     shall be granted for service under Article 3 of this Act as
5     provided in Section 3-110.8, to any active member of this
6     Fund upon transfer of such credits pursuant to Section
7     3-110.8. If the amount by which (1) the employer and
8     employee contributions that would have been required if he
9     had participated in this Fund during the period for which
10     credit is being transferred, plus interest thereon at the
11     effective rate for each year, compounded annually, from the
12     date of termination of the service for which credit is
13     being transferred to the date of payment, exceeds (2) the
14     amount actually transferred to the Fund, then the amount of
15     creditable service established under this paragraph 10
16     shall be reduced by a corresponding amount in accordance
17     with the rules and procedures established under this
18     paragraph 10.
19         The board shall establish by rule the manner of making
20     the calculation required under this paragraph 10, taking
21     into account the appropriate actuarial assumptions; the
22     member's service, age, and salary history; the level of
23     funding of the employer; and any other factors that the
24     board determines to be relevant.
25         Until January 1, 2010, members who transferred service
26     from an Article 3 system under the provisions of Public Act



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1     94-356 may establish additional credit in this Fund, but
2     only up to the amount of the service credit reduction in
3     that transfer, as calculated under the actuarial
4     assumptions. This credit may be established upon payment by
5     the member of an amount to be determined by the board,
6     equal to (1) the amount that would have been contributed as
7     employee and employer contributions had all the service
8     been as an employee under this Article, plus interest
9     thereon compounded annually from the date of service to the
10     date of transfer, less (2) the total amount transferred
11     from the Article 3 system, plus (3) interest on the
12     difference at the effective rate for each year, compounded
13     annually, from the date of the transfer to the date of
14     payment. The additional service credit is allowed under
15     this amendatory Act of the 95th General Assembly
16     notwithstanding the provisions of Article 3 terminating
17     all transferred credits on the date of transfer.
18     (b) Creditable service - amount:
19         1. One month of creditable service shall be allowed for
20     each month for which a participating employee made
21     contributions as required under Section 7-173, or for which
22     creditable service is otherwise granted hereunder. Not
23     more than 1 month of service shall be credited and counted
24     for 1 calendar month, and not more than 1 year of service
25     shall be credited and counted for any calendar year. A
26     calendar month means a nominal month beginning on the first



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1     day thereof, and a calendar year means a year beginning
2     January 1 and ending December 31.
3         2. A seasonal employee shall be given 12 months of
4     creditable service if he renders the number of months of
5     service normally required by the position in a 12-month
6     period and he remains in service for the entire 12-month
7     period. Otherwise a fractional year of service in the
8     number of months of service rendered shall be credited.
9         3. An intermittent employee shall be given creditable
10     service for only those months in which a contribution is
11     made under Section 7-173.
12     (c) No application for correction of credits or creditable
13 service shall be considered unless the board receives an
14 application for correction while (1) the applicant is a
15 participating employee and in active employment with a
16 participating municipality or instrumentality, or (2) while
17 the applicant is actively participating in a pension fund or
18 retirement system which is a participating system under the
19 Retirement Systems Reciprocal Act. A participating employee or
20 other applicant shall not be entitled to credits or creditable
21 service unless the required employee contributions are made in
22 a lump sum or in installments made in accordance with board
23 rule.
24     (d) Upon the granting of a retirement, surviving spouse or
25 child annuity, a death benefit or a separation benefit, on
26 account of any employee, all individual accumulated credits



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1 shall thereupon terminate. Upon the withdrawal of additional
2 contributions, the credits applicable thereto shall thereupon
3 terminate. Terminated credits shall not be applied to increase
4 the benefits any remaining employee would otherwise receive
5 under this Article.
6 (Source: P.A. 95-483, eff. 8-28-07; 95-486, eff. 8-28-07;
7 95-504, eff. 8-28-07; 95-812, eff. 8-13-08; 95-876, eff.
8 8-21-08; 96-299, eff. 8-11-09.)
9     Section 90. The State Mandates Act is amended by adding
10 Section 8.34 as follows:
11     (30 ILCS 805/8.34 new)
12     Sec. 8.34. Exempt mandate. Notwithstanding Sections 6 and 8
13 of this Act, no reimbursement by the State is required for the
14 implementation of any mandate created by this amendatory Act of
15 the 96th General Assembly.
16     Section 99. Effective date. This Act takes effect upon
17 becoming law.".